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Strategic Management Ansoff Matrix

1. INTRODUCTION

Corporate strategic decisions are usually based on the methods through which an organization could leverage its existing competitive advantage in promoting value and ensuring growth (Lynch, 2009), while sustainable competitive advantage depends largely on how well a company performs these actions (Porter, 2008). The need for companies to grow and expand has been known to drive product and marketing innovation, which in turn prompts them into adopting different organisational strategies, based on the products they sell and markets they target (Ansoff, 1984).

The Ansoff Matrix, developed by Igor Ansoff in 1957 highlights four major strategic options (Figure 1) through which an organisation could adapt its new or existing products into a new or existing marketplace. The matrix is employed by businesses in decision-making processes surrounding product offerings and market growth strategies. The matrix is also known as the Product/Market growth matrix and it major function is to help organisations in evaluating available options for growth given their product and market mix. Johnson et al (2008) also depict it as a method of ascertaining the benefits or risks associated with each strategic option. The major strategic options available, as depicted in Figure 1, are for an organisation to penetrate its existing market, develop its market, develop its products or diversity completely with a new product into a new market.

Ansoff matrix

Figure 1: Ansoff Matrix. Source: Ansoff (1957), adapted from Lynch (2009)

2. QUADRANTS

2.1. MARKET PENETRATION

As stated earlier, there are four output options for the Ansoff Matrix. The first of which is market penetration. This is a strategic option for an organisation seeking to expand its market share in an existing market, with an existing product. Mercer (1996) states that the growth strategy inherent in the Market Penetration option is for an organisation seeking to maintain or increase share of its existing products within the market place, gain market leadership, change competitive processes within a matured market, or increase awareness amongst existing consumers. According to Hooley et al (2004), the option to penetrate deeper within the marketplace is a low risk option that makes use of existing resources.

A typical example of an organisation using this strategy would be Southwest Airlines. Southwest Airlines aggressively offers low cost flights within small distance cities. The company’s existing product is low cost travel, which is an industry dominated by several companies and witnessing high competitive pressures across all major markets. However, through its combination of aggressive marketing and low cost pricing, the company is able to dominate the market within Southwest United States (Shaw, 2007).

Another example of market penetration strategy would be that of Pakistan State Oil. The company experiences competition from local and foreign oil companies that sell petroleum through retail petrol stations. However, it has been able to increase its market share from 40% to 65% over a period of 4 years by opening new retail outlets and investing in external advertisement (Economic Review, 2005). The strategy adopted by Pakistan State Oil is similar to that of Southwest Airlines, in that they operate within competitive markets, but by investing competitively, they are able to maintain market share and grow within their respective industries.

This strategy also illustrates the low risk advantage of market penetration. The companies utilise existing products in an already known market. They do not have to invest in research and development or excessively advertise within a new market in order to create awareness. Adopting this strategy would cement the organisation’s position within the industry and increase the barriers for entry for new competitors (Porter, 2008). Since market penetration is focused on retaining existing customers, it is a lot cheaper than acquiring new customers in an unknown market.

However, a major disadvantage of this strategy is that it does not promote corporate growth into other potentially higher earning sectors (Watts et al, 1998). By focusing simply on retaining existing customers, Watts et al argue that the company loses out on the new investment potential, while Fifield (1998) also depicts that expanding market share within an existing industry poses a significant risk as the industry growth may decline and the organisation has lower growth potential.

2.2. MARKET DEVELOPMENT

The option to develop a market is recommended by Ansoff to organisations that aim to offer an existing product into a new market. The various alternatives available would be to leverage an existing product into a new geographical region, using different product dimensions, distributing the products through new channels, or adopting different pricing strategies (Proctor, 2000). The major goal of market development would be to attract a new customer segment, using a slightly different strategy, into consuming an existing product (Ansoff, 1984). The risk associated with this strategy has been depicted by Watts et al (1998) to be moderate, due to the risks associated with entering a new market.

According to a case study in Christensen et al (2005, p.51), Arm and Hammer owned a small business selling baking soda product and were able to attract a new segment of customers by identifying new uses for baking soda. They realised that apart from being used solely for baking, the products could be used as a household cleaning and deodorizing product, so they repackaged its contents and marketed them to supermarkets and corner shops as effective cleaning agents. Due to the relative infancy of the market, they had to engage in a series of advertisement that helped to communicate the relevance of their product and methods through which it could be used for other purposes. Through this strategy, they were able to increase revenue and adapt one product to different market segments. This case study confirms previous assumptions that through market development, a company could leverage an existing product into a new market (Collis and Montgomery, 2008).

The market development actions they engaged in were essential in building product awareness amongst the new customers. According to Fifield (1998), companies engaging in market development would gain new customers, increase turnover and profits, and ensure corporate growth due to the relative potential for growth within the new segment. However, Hooley et al (2004) also discuss the risks associated with market development. The option to foray into a new market segment entails the cost of developing this new market, which consists of market costs and a potential change to the company’s marketing mix. If the strategy fails, then the company would have lost the substantial capital utilised in marketing and pushing this product into the new market.

2.3. PRODUCT DEVELOPMENT

The product development strategy is directed at organisations seeking to offer a new product into an existing market. This definition entails any new or modified product aimed at an existing market. Lynch (2009) asserts that the decisions to develop the product prior to delivery into the market is based on the company’s intention to exploit new technology, protect market share by introducing innovative products and also to utilise excess production capacity. This strategy entails a moderately high risk due to the level of product development and research required to develop a new product for a market that is already used to an existing product (Watts et al, 1998).

The Apple iPod is a real life example of a new product delivery into an existing market. Prior to its introduction, most individuals usually listened to music on cassette players, desktop computers and the Sony Walkman (CNet, 2008). There was no innovative product in the market that allowed individuals to carry their music library on a digital device without the need for cassettes or compact discs. The iPod is a typical example of product development due to its innovative approach to playing music. It consisted of the sleek wheel navigation system that was relatively easy to use and display methods, which made scrolling through vast amounts of music much easier. Due to the product innovation method employed during its development, the Apple iPod quickly gained market share and is now the market leader in music devices (CNet, 2008).

In accordance to Johnson et al’s (2008), the product development strategy associated with the delivery of the Apple iPod enabled the organisation to increase its customer base, brand awareness, brand into the music business, and utilise the iPod’s success as a platform in establishing the iTunes Music Store. Also confirming Hooley et al (2004) view that if a product development strategy for entry into a new market is successful, it may lead the company into introducing more innovative products into the same market or parallel markets, such as in the introduction of iPhone into the smart phone market, and most recently the iPad into the slate PC market.

However, the benefits associated with such a strategy seem to be limited to strong brands with an already existing brand image in similar markets. Watts et al (1998) depict that smaller firms aiming to introduce a new product into an existing market may face shortfalls in marketing the product and investing in product development. Doyle (1997) also states that the high costs and time related in developing a new product for an existing market may be discouraging. Lynch (2009) thereby concludes that careful research needs to be undertaken before an organisation can implement a product development strategy, due to the lack of guarantee regarding market success.

2.4. DIVERSIFICATION

The final quadrant in the Ansoff’s Matrix is a diversification strategy. Such a strategy entails offering a new product in a new market and is often used when a market has become saturated and profits are limited (Lynch, 2009). Doyle (1997) asserts that diversification strategies are usually in three forms: full diversification, backward diversification, or forward diversification. The diversification form adopted by the organisation usually depends on whether they are entering a completely new market, integrating backward and competing with suppliers or integrating forward and competing with buyers. Diversification, whatever form it entails has a generally high risk due the fact that the company would be offering an entirely new product in a new market.

The Virgin Group is a typical example of a company that has consistently diversified into new markets. It forayed into the credit card industry with Virgin Money offering competitive credit card rates to customers; it diversified into travel and offers holiday packages to holiday goers, it also diversified into the mobile phone market with Virgin Mobile and most recently into Fitness with its range of Fitness centres. Forward diversification is being utilised in all these business ventures and have proved successful for the company. It is able to consistently leverage its brand image across different market segments. Johnson et al (2008) argues that Virgin’s main product is its brand, which it sells across different markets, and not necessarily the businesses its runs.

Holbrook and Schindler (1996) state that companies that consistently practice diversification strategies are usually large with a reputable brand image such as Apple, General Electric and Virgin. They are able to leverage their brands across different markets due to high customer loyalty (Hooley et al, 2004). Therefore it seems that this strategy, just like that of Product Development is practised best by organisations with a reputable brand and resources required to develop and market a product effectively, be it an actual product or a brand. Lynch (2009) highlights that the potential benefits of diversification could be numerous. The company enjoys the benefits of operating within diverse markets, thereby ensuring improving profitability and customer loyalty. The company is also able to attain market leadership if the market is not crowded and if it has a unique product to sell. However Mercer (1996) criticises diversification strategies as a jack of all trade practice of venturing into several markets and not being the master of one, a statement that is typical of Virgin’s position. It is not a market leader in any of its markets.

3. CONCLUSION

The Ansoff matrix has proved useful, and with the use of real life evidence, it accurately depicts the most effective strategies that businesses could use depending on their market and customer segment. Though the four strategies apply differently to companies depending on their market and product intentions, it also depends hugely on firm specific capabilities such as brand image and research capabilities. Organisations seeking to adopt its usage when seeking strategic direction should therefore do so in due consideration of their firm specific strengths and benefits and how these could also be applied to the products being offered and markets being targeted.

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4. REFERENCES

Ansoff, I. H. (1957) Strategies for Diversification, Harvard Business Review, Vol. 35 (5), pp.113-124

Ansoff, H. I. (1984) Implanting Strategic Management, Prentice-Hall: NJ, 455pp

Economic Review (2005) ‘Performance of Oil and Gas Sector.’ Economic Review, Vol. 36, pp4- 13

Christensen, C., Cook, S., and Hall, T. (2005) ‘Marketing malpractice: The cause and the cure.’ Harvard Business Review, Vol. 14(3), pp56-73

CNet (2008) The complete history of Apple’s iPod [online], www.crave.cnet.co.uk, [accessed: 30/03/10]

Collis, D. and Montgomery, C. A. (2008) Competing on Resources, Harvard

Business Review, Jul-Aug p140-150

Doyle, P. (1997) Marketing Management and Strategy, Prentice Hall: NJ, 4334pp

Fifield, P. (1998). Marketing Strategy, 2nd Ed, Butterworth Heinemann: NJ, 344pp

Hitt, M.A., Ireland, R.D., and Hoskisson, R.E. (2009) Strategic Management: Competitiveness and Globalization (Concepts and Cases). 8th edition. Mason, Ohio: South-Western Cengage Learning.

Holbrook M, and Schindler R. (1996) Market Segmentation Based on Age and

Attitude Toward the Past: Concepts, Methods, and Findings Concerning

Nostalgic Influences on Customer Tastes. Journal of Business Research, 37

(1): p27-39

Hooley, G. J., Saunders, J. A. and Piercy, N. (2004) Marketing Strategy and Competitive Positioning, 3rd Ed, Pearson Education: London, 622pp

Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring corporate strategy: text & cases. 8th Ed. Pearson Education Limited: Essex, UK. 878pp

Lynch, R. L. (2009) Strategic management, 5th ed, Pearson Education Limited: UK, 826 pp

Mercer, D. (1996) Marketing. 2nd edition. Oxford: Blackwell Publishing Ltd.

Porter, M. E. (2008) The Five Competitive Forces That Shape Strategy. Harvard Business Review, Jan, Vol. 86 (1), p78-93

Proctor, T. (2000) Strategic Marketing: An Introduction, London: Routledge.

Shaw, S. (2007) Airline Marketing and Management. 6th edition. Burlington: Ashgate Publishing Company.

Watts, G., Cope, J., and Hulme, M. (1998) Ansoff’s Matrix, pain and gain, International Journal of Entrepreneurial Behaviour and Research, Vol. 4 (2), pp101 – 111

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Free Strategic Management Dissertation

1. INTRODUCTION

a.INDUSTRY BACKGROUND

Information Technology is increasingly moving to the center of national competitiveness strategies around the world, due to its ground-breaking power as a significant enabler of growth and development. Economic history has shown that, as developed countries approach the technological frontier, Information technology is crucial for them to continue innovating in their processes and products in order to maintain their competitive advantage. On the other side IT has also proven crucial and important for enabling developing economies to leapfrog to higher stages of development and fostering economic and social transformation. . In recent years there has been a global boom in IT consulting and services which has resulted in the development of IT industry and has also revolutionized its practice. IT consulting deals with getting business sectors to utilize information technology in their day to day business needs and in meeting various business objectives. According to the Datamonitor (2009) the global IT services industry grew by 6.7% in 2008 to reach a value of $1,057 billion with compound annual growth rate of 9.4% in the period of 2004 -2008 as shown in figure 1.

Figure 1: Global IT services industry value. Source: Business Source Premier

UK being the financial hub of the world, has seen its IT industry growing immensely over the period of time as result of which , many IT consulting companies have come into existence. According to the prospects, (2009) IT industry nearly employs 5% of UK workers and use of IT is particularly important for over 90% of managers, professionals, associate professionals, and administrative staff and most importantly in the financial service markets. According to the Datamonitor, (2002), UK is the largest source of IT expenditure in Europe mainly because of its dominance in the financial markets sector, particularly in investment banking and asset management. The UK IT Expenditure in Financial Services market grew by 0.6% in 2000, to reach a value of $7.03 billion with compound annual growth rate of 3.3% in the period 1999-2001 as shown in figure 2.

Figure 2: United Kingdom IT expenditure in Financial Services. Source: Business Source Premier

As the use of IT becomes increasingly important as a key driver of business competitiveness, increasing emphasis is placed upon the development of skills such as relationship management, business process analysis and design and project management.

b. ORGANISATION/COMPANY BACKGROUND:

Nasim Consulting is a UK based premier IT consulting and Development Company, dedicated to helping candidates and clients achieve peak performances with professional services. The company was established in 2002 and is based in ‘Cardiff’ with its head office in ‘Ebbw Vale’. Its founders have a long and established record in the Business Intelligence Industry.

The company aims at supplying efficient consulting solutions to its clients across UK and Europe. The company provides different information technology services to its clients such as, Portal initiative, Integration services, Custom Application Development, Web services, Content Management, Dual shore development (about us, 2009). The company has business associations with a varied number of prestigious clients and companies including BEA systems, British Telecom, Sky Digital and Alliance Value Proposition (about us, 2009).

Nasim Consulting also delivers high end service at reduced expenditure to its clients with the implementation of latest software technology and commitment. As a company, Nasim Consulting strives to keep strong ties with its partners and clients by building business relationships and enhancing technology. The long term objectives and aim of the company is to make the Nasim Consultancy a global organization. However given the current market condition there is an immense competition and challenge for organizations in order to sustain in the market.

c.NATURE OF THE PROBLEM:

The IT service industry is immensely competitive in nature with the giant market players enjoying the significant economies of scale (in their ability to handle large volumes of transactions more economically) and also economies of scope which makes it difficult for small IT consulting firms like Nasim consulting to survive and increase their market share. On the other hand due to the current market scenario established companies, relying on an existing business image, may be unwilling to trust smaller, less established companies, which offer larger market players an advantage.

This financial meltdown and also the growing competition in IT consulting is has resulted in Nasim consulting, facing a huge challenge to survive, grow and maintain its positioning in the current market and at the same time achieve its corporate objectives of increasing the market share, customer base and service range.

As customer spending is slowing down to its worst, the company is experiencing huge decline in its sales and profit and also on the other hand, the company is facing a huge challenge of satisfying its clients and partners who are more interested in service quality, than in quantity.

Given the necessity for growth it’s important for the company to develop the effective strategy to achieve long term sustainability and establish its market position. Nasim consulting being a small firm in a fairly fragmented market, targets and serves the needs of local and regional small business, as well as small companies that target clients in specific industry.

Because of the economic slowdown small business are spending less on IT development, new technology and innovation. A recent survey according by Mintel reports, (2009) shows that 42% of the small businesses are expected to spend less on new technology and development and 19% of the small businesses have already stopped spending on new technology and innovation making it more difficult for IT consulting firms to survive in the market. According to the Vavra, (1992) due to low customer spending and considering the decline in attracting new customers, the only way to make profit is to increase the life time spending of the existing customers.

Therefore the main problem and challenge that Nasim Consulting is currently facing is customer retention.

d. RESEARCH AIM:

The aim of this research is to identify the resource based or market based factors which are responsible for Nasim’s poor performance in customer retention. De wit and Meyer, (2004) states that for organizations to be successful in today’s intense competition, it’s important that they find right alignment between its external environment and internal operations.

Therefore, this research will focus on identifying the strategy development of ‘Nasim Consulting’ in context of both market based and resource based views.

Taking into account MBV the research will focus on following issues;

Corporate strategy
Marketing strategy.
Sales and Marketing
Service quality.
Customer retention.

Taking into account RBV following issues will be analyzed;

Recruitment process.
Employee relationship and motivation.
Employee training and development
Development of firm- owned resources.

e.RESEARCH PROCESS

This study would commence with the analysis of the literature review in chapter 2. Then the methodology with which the study was carried out is outlined in chapter 3. The methodology includes semi-structured interviews with 4 senior managers at Nasim Consulting, it also includes 2 focus groups in which 4 support staff and 3 highly skilled staff working for the organization was interviewed.

The findings from the results are outlined in chapter 4. They are analyzed using a deductive approach in which they are categorized according the to theory in the literature review. The discussion in chapter 5 however is not arranged according to the literature review, but it aims to adopt a coherent approach to answering the research question. The research conclusion is expatiated in Chapter 6 and the recommendations in Chapter 7.


2. LITERATURE REVIEW

a.MARKET BASED VIEW:

Market based view has certainly been the earliest and most primitive viewpoint in the field of strategic management for organizations to gain competitive advantage and sustainable growth. De wit and Meyer (2004) claims that to achieve sustainable growth and competitive advantage firms should take outside-in approach by taking external environment as its core and starting point in order to formulate and build effective strategy. Panagiotou (2008) goes on to state that firms who adapt MBV perspective are objective and rational and are driven by external market with their focus on planning and positioning. In addition to that Day, (1994) states that it can be argued the successful companies are externally oriented and market driven as they focus on exploiting the particular segment of the market by targeting the price sensitive consumers. Jaworski and Kohli, (1993) states that for successful companies markets are leading and resources are following. He goes on to say that market driven company’s strategy begins with the analysis of the environment to identify attractive market opportunities and target potential customers. However he argues that it’s also important that once these customers have been won over and market position has been established, the firm must build on its position by adapting itself to changes in the environment. On the other hand, Mintzberg, et al., (1998) refers MBV approach as the “positioning approach” because this perspective of strategy focuses on market positioning and responds to external developments.

Porter, (1979) suggests that companies that focus on a particular niche and companies that strongly differentiate their product offering can achieve strong and profitable market share. Buzzell and Gale, (1987) emphasizes that the position of being a market leader is particularly important, as companies with the high market share benefit from economies of scale. Porter, (1979) argues that there are two important factors that firm must underline in order to choose a competitive strategy. Porter proposes five-force framework in order to compete and determine the attractiveness of an industry by analyzing the power of the different factors as shown in the fig (2.1.1). These five forces impinging on the firms profit potential are

Threat of new entrants.
Threat of substitutes.
Bargaining power of suppliers.
Bargaining power of buyers.
Rivalry among the existing customer

Figure (2.1.1): porter’s five forces

Source: Framework adapted from Porter, M.E. (1979)

On the other hand Panagiotou, (2009) proposes the modified integrated framework to analyse industrial structure. Apart from Porters five-force, he highlights the importance of further three more forces, which firms need to take consideration to gain and sustain competitive advantage which are as following;

Cooperative Engagements
Complementary Products and Services
Distribution Channel

He goes on to further suggest that a good spread of alliances and other partnerships provide the company with diversity and reinforcement. Figure (2.1.2): Modified framework

Source: Adapted from Panagiotou, (2009)

Porter, (1979) suggests that after the firm identifies its capability and strength by assessing these five forces, they must then choose defensible positions by selecting one of the three generic strategies. On the basis of the main competitive advantage of a firm in relation to its competitors Porter (1980 and 1985) has defined three generic strategies as shown in the fig. (2.1.3) which are as following;

A) Cost leadership: The first generic strategy is cost leadership, Porter, (1980) states that low cost leadership helps the firm above average returns in the industry despite strong competitive forces. This type of strategy can be chosen by a firm capable to produce and commercialize at a lower cost than its competitors. Both the profitability and the market shares controlled by these firms are significant, because low cost leaders are able to match the prices of their most efficient competitors and these firms will usually target groups of consumers that have basic, needs, requiring low quality products and services. However, porter, (1996) emphasizes on the need of consistency and says that lack of consistency dilutes the positioning of the company. So if the goal of the firm is to be a low cost provider, then costs of each activity should be kept to a minimum, while still maintaining the threshold features that are required to Stay in the market .Porter argues that strategic positions are not sustainable if there are no tradeoffs with other positions. Also ,Miller and Dess,(1993) argue that in order to achieve cost leadership, the firm has to obtain a high relative market share, which requires capital investment in product R&D and manufacturing, as well as aggressive pricing.

Figure (2.1.3): Porter Generic

Source: Adapted from Porter, (1980)

B) Differentiation: The second generic strategy is differentiation. In a differentiation strategy firm seeks to be unique in its industry by differentiating its product or service offering and along with some dimensions that are widely valued by buyers (Porter, 1980). It can be design or brand image, technology, features, customer service, dealer network or other dimensions Differentiation can be achieved on the grounds of any specific organizational skill or competence that represents a competitive advantage in contrast to other firms. However it can be argued that cost leadership strategy can also represent version of the Differentiation strategy, but in this strategy the focus is rather on differentiation through superior quality and service, in order to develop a distinctive market proposition. A firm that can achieve and sustain differentiation will be an above average performer in the industry if its price premium exceeds the extra cost incurred in being unique. Therefore it’s important that the firm must seek the ways of differentiating the lead to a price premium greater than the cost of differentiating. Porter, (1980) goes on to state that although the Cost Leadership strategy is characterized by a successive reduction of the selling price, but through a differentiation approach the firm is capable to use a premium price, with higher profit margins. In these conditions, the main aim of the organization is to create price loyalty and price inelasticity, which can create entry barriers for direct competitors, and mitigate the power of buyers, who lack comparable substitutes.

C) Focus strategy: The third generic strategy advocated by Porter is focus strategy. This strategy is quite different from the others because it is based on the choice of a narrow competitive scope within an entire industry. Companies pursuing this strategy focus on the selected segment or a group of segment, particular buyer group or geographic market in the industry by tailoring its strategy to serving them to exclusion of others (Porter, 1980). Porter states that a company can achieve and sustain focus strategy if it is capable of developing a highly specialized expertise in satisfying a clearly defined group of customers, with specific needs and demands and by optimizing its strategy for target segment a firm can achieve a competitive advantage even though if it does not possess a competitive advantage over hall. Like differentiation strategy, focus strategy can take many forms; it has two variants which are “Cost and Differentiation”. In cost focus a firm seeks cost advantage in its target segment, while in differentiation focus a firm seeks differentiation in target segment. However it can be argued that focus strategy or the Market Niche Leadership is usually followed by small firms, which lack the level of resources to develop a cost leadership or a differentiating advantage at overall market scale.

Porter, (1980) states that Effective implementation of any of these generic strategies usually requires total commitment and supporting organizational arrangements that are diluted if there is more than one primary target. Porter outlines that the worst position for a firm is to be ‘stuck in the middle” in other words, if a firm is trying to pursue simultaneously more than one competitive strategy. He considers that each type of competitive advantage is independent and specific, and any attempt to combine low cost leadership and differentiation skills leads the firm’s management in conflicting directions. However, it can be argued that this argument has lost its appeal given the current market environment where the competitive pressures have multiplied substantially. These days some highly differentiated firms are forced to reduce prices to sell their merchandise, because of the fierce competition developed within their strategic group (Panagiotou, 2006)

Despite the significant contribution of porter’s generic strategy, his research has received its share of academic criticism. Stonehouse et al., (2000) argues that low cost leadership alone does not lead to competitive advantage unless there is an element of differentiation. Johnson and Scholes,(1999) argued that a strategy combining elements of low cost, price and leadership is known as hybrid strategy and Mintzberg et al., (1998) advocated the hybrid strategy for it combines both elements of low cost leadership with differentiation. On the other hand, Chrisman et al., (1988) argue that porter’s generic strategies are too general and are not considered in the context of different market environments (Boyacigiller and Adler 1991). Day and Wensley (1988) argued that generic strategies have limited practical application because of their simplicity and rigidity while as Rubach and McGee, (1998) argued that the strategic framework is different in the highly fragmented markets of the retailing sector. On the other hand Dawes and Sharp (1996) in their analysis of various Generic Strategies clusters argue that Porter’s model “does not describe/fit empirical reality, and provides no support for the notion that these generic strategies are routes to superior profit” (Dawes and Sharp 1996, p. 36)

Despite its criticism, Porter’s models are still important and valuable tools for business managers in order to analyze the market environment and formulate effective strategies. Boulding et al. (2005) state that the main advantages of Porter’s work is the incorporation of market fundamentals in the strategic framework of the business enterprise which has shifted the priorities of the firm from production to marketing and customer relations, by highlighting the importance of satisfying the needs of customers in order to achieve long-term profitability and sustainability.

Given the nature of business of ‘Nasim Consulting’ that is providing IT services, it’s important for them develop a strong marketing strategy with the focus on particular market segment to exploit the market opportunities. As the customer is the main focus in MBV, it also highlights the importance of the service quality in order to win these customers.

a.MARKETING STRATEGY:

Kotler and Armstrong state that marketing strategy is a marketing logic by which a business unit expects to achieve its marketing objective. Marketing strategy consists of making decisions on business’s marketing expenditure, marketing mix and marketing allocations in relation to expected environmental and competitive conditions. According to the Palmer, (2000) corporate mission statement provides a focal point for the marketing planning process. It’s important for organizations to integrate market orientation into their strategy in order to obtain competitive advantages over their rivals as company creates value through the configuration and co-ordination of its multi-market activities (Collis & Montgomery, 2005). On the other hand McDaniel, et al., (2006) states that developing a marketing strategy is important in creating and maintaing a fit between the organisation’s objectives and resources and evolving market opportunities. Drucker, (1973) claims that the successful strategy depends on understanding and identifying customer needs and offering the product or services that satisfies their needs. McDaniel, et al., (2006) addresses that for firms to discover the marketing opportunity; it must also know how to find the alternatives.

Ansoff, (1989) proposed strategic opportunity matrix also called as “Ansoff Matrix” as shown in the fig, (2.1.1.1) that can be used to develop strategic alternatives. Ansoff Matrix is an effective and a good basic tool for analyzing and planning where an organization may go, and assessing the risk. In order for firms to match products with the market, they need to explore four options which are “Market Penetration”, “Market Development”, “Product Development” and Diversification. McDaniel, et al., (2006) addresses that through market penetration the firms can try to increase market share among existing customers. Through Market Development firms can attract new customers to existing products. On the other side product Development strategy entails the creation of new products for current customers and Diversification helps in increasing sales by introducing new products into new markets. In addition this Lynch, (2006) proposes a modified framework of “Ansoff Matrix” called as Market Option Matrix which identifies the product and market option available to the organisation, including the possibility of withdrawal and movement into unrelated markets. He states that “Market Option Matrix” examines the options available to the firm from broader strategic perspective than the simple market matrix, which only doesn’t consider the possibility of introducing new product but also explores the possibility of withdrawing from the markets and moving into unrelated markets.

Figure (2.1.1.1): Ansoffs’s Matrix- Strategy Development Directions:

Source: Adapted from Ansoff, (1988)

On the other hand Palmer, (2000) states that “Marketing Mix” framework as shown in the fig,(2.1.1.2) highlights the principal decisions to management in configuring the offerings to suit customers needs and can be important to develop long term marketing strategies. In addition to this McDaniel, et al., (2006) states that “Marketing Strategy” involves the activities of selecting one or more target markets and developing and maintain a marketing mix that will produce mutually satisfying exchanges with target markets. Zeithaml, et al., (2006) defines “Marketing Mix” as a unique blend of product, place, promotion, pricing, people, process and physical evidence which are designed to produce satisfying exchanges with a target market. McDaniel, et al.,(2006) states that ‘Product’ is the heart of marketing mix and the starting point is the product offering and strategy, which in IT consulting is service as well, therefore quality of the service or product is important to gain competitive advantage. ‘Place’ strategies are concerned with making product available when and where customers want them (Palmer, 2000). ‘Promotional’ strategies are concerned with bringing out mutually satisfying exchanges with target market by informing, by informing, educating and reminding them the benefits of the company or the product (McDaniel, et al., 2006. P.52). Pricing is “a critical element of most companies’ marketing mix, as it determines the revenue that will be generated” (Palmer, 2000, p. 22). It also determines the generic strategy of an organization, if a firm is pursuing low cost strategy to gain competitive advantage and to attract price sensitive customers. (Palmer, 2000) states that ‘people’ are important part of the marketing mix and to the marketing of the services. Effectiveness of the marketing is likely to be affected my employees who interact with customers. ‘Process’ is also important but more important in the service sector and can be of critical concern to the consumer of high contact service. This highlights the importance of proper training of the staff in the service sector (McDaniel, et al., 2006). ‘Physical evidence’ is also important in order to guide buyers of intangible service through choice available to them (Palmer, 2000, p. 23). However within the marketing mix, important customer-focused issues such as quality of service can become a lost, scholars argue that more holistic approach should be taken to approach customer needs (Gronroos, 1994).

Figure (2.1.1.2): Marketing Mix.

Source: Adapted from Panagiotou, (2009)

b. SERVICE QUALITY:

Quality of service has båån studied in the area of business management for years because the market is more competitive and marketing management has transferred its focus from internal performance such as production to åxtårnal interests such as satisfaction and customers’ perception of service quality (Zithaml & Bitner 1996). Now, the major ålåmånt in world market competition is quality. McDaniel, et al., (2006) states that “service is the result of applying human or mechanical efforts to people or objects which involve a deed, a performance, or an effort that cannot be physically possessed. McDaniel, et al., (2006) argues that although a comparison of goods and service marketing can be valuable but it’s hard to differentiate between manufacturing and service firms and many firms can point to service as a main factor in their service. On the other hand Kotler, et al., (1996) defines service as a benefit that one party can offer to another which is intangible and doesn’t result in ownership of anything. McDaniel, et al., (2006) also addresses that services have unique characters that differentiate them from goods and is also important that marketing strategies need to be adjusted for these characteristics. Those characteristics are ‘Intangible’, ‘Inseparable’, ‘Heterogeneous’ and ‘perishable’.

Levitt, (1981) argues that “there is no such things as service industries, as there are only industries where service components are greater or less than other industries”. McDaniel, et al., (2006) states that service quality is difficult to define because of its characteristics, but research has shown that customers evaluate service quality on the basis of five components. ‘Reliability’, ‘Responsiveness’, ‘Assurance’, ‘Empathy’, and ‘Tangibles’. Reliability has been found one of the most important components to the consumers. It is the ability to perform the service dependably and consistently. It’s important to provide reliability in order to achieve sustainable growth and build customer relationship (Zeithaml, et al., 1996). ‘Responsiveness’ is an ability to prompt service (McDaniel, et al., (2006). ‘Assurance’ is the knowledge of the skilled employees who treat customers with the trust and make them feel that they can trust the firm (McDaniel, et al., 2006, p.365). ‘Empathy’ on the other hand is the care and attention shown by the firm towards loyal customers, it’s also important for the retention of the customers for long period of time ((Palmer, 2000). And Tangibles is the physical element which is included in the service. The overall service quality can be measured by analyzing the customer response to all of the five components. However, given the service organisations need to focus on the customer and to use knowledge about the customer in order to drive business strategy. Zeithaml, et al., (2006) proposes a ‘Gap Model of Service Quality’ as shown fig, (2.1.2.1) in order to improve quality service and service marketing. The model identifies five gaps that can cause problems in service delivery and influence customer evaluation of service quality.

GAP 1: Th³s gap is båtwåån consumår åxpåctation ànd management pårcåption. Th³s gap occurs whån management ³s not aware îf cårtain critical consumårs åxpåctations. Àt th³s stagå, thå management doås not know how thå service should bå dåsignåd. Thåy also don’t know what thå right quality is for the customer. (McDaniel, et al., 2006) argues that firm that does little customer satisfaction research is likely to experience this gap.

GAP 2: Th³s is the diffåråncå båtwåån Thå Company’s quality spåcifications ànd management pårcåptions îf consumår åxpåctations îf thå service ànd its quality. Management was awarå îf critical consumår åxpåctations but à variåty îf factors such às råsourcå constraints, markåt conditions, ànd/îr management indiffåråncå might pråvånt thåm from såtting spåcifications tî mååt thoså åxpåctations.

GAP 3: This is the gap between the service quality specification and the service that actually is provided. (McDaniel, et al., 2006) states that if both gap 1 and 2 have been closed then this gap is due to poor trained employees. This gap can be closed by training the employees and encouraging them.

GAP 4: Th³s is the diffåråncå båtwåån thå quality îf thå service dålivåry ànd quality promisåd ³n markåting. À potåntial råason fîr poor pårcåptions îf service quality by consumårs ³s that thåir åxpåctations arå booståd by mådia advårtising, salås pråsåntations ànd othår communications tî låvåls beyond à company’s capabilities.

GAP 5: It is the most crucial gap às ³t indicates thå diffåråncå båtwåån åxpåctåd ànd pårcåivåd service quality. ²t ³s à gap båtwåån the customers’ åxpåctations îf thå service ànd thå service thåy actually råcåivå. Gap 5 ³s thå function îf the other four gaps.

Zeithaml, et al., (2006) states that the ‘Gap Model’ positions the key strategies and decisions in service marketing to begin with customers and build the organizational task around what’s needed to close these gaps between customer and management perception.

Figure, (2.1.2.1): Gap Model

Source: Adapted from Zeithaml, et al., (2006)

2.1.3 CUSTOMER RETENTION:

Hoffman, (2006) states that “customer retention refers to the focusing the firm’s marketing effort towards the existing customer base”. In contrast to seeking new customers, firms engaged in customer retention work to satisfy customers with the intent of developing long term relationship. Due to the several changes in marketing environment and increase in the competition customer retention has become increasing important. Customer retention is a key strategy in today’s leading-edge services firms, as the competition is intense and services and goods differentiation among competitors is minimal (Vavra, 1992). Despite its potential benefits, customer retention did not obtain much attention in strategic or marketing planning processes. Grant’s (1995, p. 122) classification of resources, for example, ignored customers as an important resource or asset and, hence, his recommended strategic planning process did not consider the value of relationships with existing customers. Dawkins and Reichheld (1990) brought the substantial advantages of retaining customers into importance. Based on their consulting experience, they claimed that a 5% increase in retention rate led to an increase in the net present value of customers of between 25% and 85% in a wide range of industries.

On the other hand, Berry and Parasuraman, (1991) state that any firms end goal and objective of marketing activities in profit sector is to make profit, irrespective of the way sales are made, whether by transactional encounters or relationships. Therefore from Relationship management perspective, successful organizations are those who manage to turn their customers into clients and from prospects into partners (Christopher et al., 1991). In addition this Vandermerwe, (1996) have pointed out that successful firms are those that `Own’ their customers and pursue ongoing values for them. Fornell and Wernerfelt (1987) suggest that based on the assumption that existing customers are profitable and cost less than to replace them, firms should therefore emphasize on spending marketing resources on the existing customers than acquiring new ones and should be aware of the profitability of not only their products but also their customers. This argument is also supported by Vavra, (1992) who goes on to state that considering the cost of wining new customers, the only way to make profit is to increase the life time spending of the existing customers. Customer retention is therefore far important than customer service. Ahmad and Buttle, (2001) state that benefits of customer retention can be both qualitative and quantitative or more specially it addresses economic and non –economic benefits. Reichheld (1996) identified six economic benefits of retaining existing customers which are as follows;

Saving on customer acquisition or replacement cost.
Guaranteed base profit.
Increase in per-customer revenue.
Low operating costs.
Free of charge referrals of new customers from existing customers.
price premiums as existing customers do not usually wait for promotions or price reductions before deciding to purchase

Now over the period of time, relationship management has emerged as an important tool in order to retain the existing customers. Levitt in 1960 already highlighted the importance of market relationships in the area of business-to-business and business-to customer’s transactions. indicated that firms should not focus on selling products, but rather on fulfilling needs by arguing that the customer is attracted by the entire buying and consumption experience, and not only by the core product. With the development of new information technology applications has opened the way to an increased personalization of marketing activities with the techniques like CRM being considered as new source of competitive advantage for modern business organizations.

Customer relationship management has emerged as a new trend in marketing that focuses on understanding customers as individuals instead of as part of a group. McDaniel, et al., (2006) defines ‘CRM’ as a “company–wide business strategy which is designed to optimize profitability, revenue and customer satisfaction by focusing on highly defined and precise customer groups”. Dyche, (2002, P.4) states that ‘CRM’is the infrastructure that enables the delineation of an increase in customer value, and the correct means by which to motivate valuable customers to remain loyal – indeed, to buy again”. However, on the other hand, Technological innovation and information liquidity have changed competitive landscapes. Fewer and fewer companies can exploit propriety, one-of-a-kind technology and exclusive supply or distribution channels to maintain competitive advantage (Chew, 2000). For the vast majority of businesses, the ability to acquire, retain and enhance customer relationships is the last place left to find advantage. CRM and its accompanying measurement potential, is then a key technique for understanding customers and managing ongoing customer activity. CRM can be used to understand past and future customer behavior, the ability for companies to convert that knowledge into business results can be a significant form of competitive advantage.

The challenge for traditional, product-oriented companies is in pulling together customer data from across the different product silos so that customer behavior can be researched more comprehensively. Pine, et al., (1995) argues that many managers continue to look at business through “the twin lenses of mass marketing and mass production” rather than with the “twin logic of mass customization and one-to-one marketing. But McDaniel, et al., (2006) argues that ‘CRM’ is a much broader approach to understand and serve customer needs than is one-to-one marketing. Hair, et al.,(2002) addresses that ‘CRM’ is a closed- loop system which helps to build relationship with customers and it is continuous and circular with no predefined starting or end point. McDaniel, et al., (2006) suggests that in order to initiate ‘CRM’ management cycle or closed –loop system, a company must identify the customer relationships by learning who the customers are and where they are located. The company must understand the interactions with current customers and using that knowledge of interaction they must capture relevant customer data. After capturing the data, the company must store the data (By efficient ‘CRM’ technology and tools) in order to identify the best customer and then leverage the customer information. The key point in ‘CRM is that customer should take centre stage in any organisation Companies that implement ‘CRM’ system follow a customer-centric focus (Zeithaml, et al., 2006). McDaniel, et al., (2006) defines customer-centric focus as an internal management philosophy, to customize the product offering based on the data collected through customer interaction. By collecting the feedback on products and services the customer-centric learn to enhance the product offering. ‘CRM’ is an important tool to build up the strategy and differentiating the product offering which is important in order to achieve competitive advantage. It is important that the companies implement efficient ‘CRM’ system to enhance the customer relationship, although some people argue that implementing ‘CRM’ is a complex process.

It’s important to conclude that customer retention should be the important business goal as customer retention management has the potential for delivering substantial profits to firms in term of long-term profitability. However, the choice of appropriate strategies may be influenced by the nature of the product, the stage of the product in the life cycle, and customers’ buying behaviours (Ahmad and Buttle, 2001).

Although MBV focuses on external environment and highlights the importance of exploiting the opportunities with the industry to achieve competitive advantage but it overlooks the internal functioning of organization which are important to even achieve external market opportunities. Also Porters framework even though outlines the main drivers of competitive advantage; it does not provide any guidance regarding their operationalization. Also the framework doesn’t include some key variables like quantity dimension which is crucial to explain the success of a cost leadership strategy where profits are not driven by high margins but rather by large quantities. Hungenberg, (2004) argues that MBV frameworks emphasizes more on the importance of profitability while as there are also other approaches that take a much broader view of strategy. Most importantly, these perspectives also include other stakeholders such as employees or the external Community surrounding a company.

b. RESOURCE BASED VIEW:

Resource based view also called inside-out perspective of strategy has a long antecedent; with research stretching back to Edith Penrose (1959). However, since early 1990, the RBV view of the firm has increasingly come to dominate the field of strategic management. According to the De wit and Meyer (2004), RBV deals with the competitive environment facing the organization but takes an inside-out perspective by formulating strategy around company’s strengths, i.e. its starting point is the organizations internal environment. As such, it is often seen as an alternative perspective to porters (1980) five forces frame work, which takes the industry structure (outside-in) as it’s starting point. Resource- Based View of firm focuses and emphasizes on the internal capabilities of an organization to evaluate and formulate strategy in order to achieve competitive advantage in their respective markets and industries. It draws upon the resources and capabilities that reside within the organization in order gain competitive advantage. Ormanidhi and Stringa, (2008) state that firms are considered to differ in competitive advantage and in operational efficiency as a result of their capable and acquired internal resources.According to Johnson and scholes, (2002) it is the distinctiveness of organizations strategic capabilities that provides them an edge to achieve extraordinary profits compared to others in the market where the strategic capability is the sufficiency and suitability of the resources and competences that organization possesses in order to be successful. Resources can be thought of the inputs that enable organization to carry out its activities and can be categorized as tangible and intangible where tangible are the physical assets that organization posses such as plant & machinery, finance and human resources while as in tangible resources are the resources that are developed by the organization over the period of time such as knowledge, culture and brands. Johnson and Scholes, (2002) state that whilst possessing of resources is important but it’s the way the firm uses its resource or in other words it’s the efficient configuration and arrangement of the resources that provides an organization with competencies.

Prahalad and Hamel, (1990) states that taking an inside-out perspective tends to emphasize the importance of a firm’s competences over its tangible resources by arguing that the critical task of management is to create an organization capable of creating products which customers need but not yet even imagined and with the collective learning of individuals within the organization itself and their ability to work across organizational boundaries, firms can achieve core competencies. Prahalad and Hamel, (1990, p.82) argue that;

“The skills that together constitute core competence must coalesce around individuals whose efforts are not so narrowly focused that they recognize the opportunities for blending their functional expertise with those of others in new and interesting ways.

However, on the other hand Kay, (1993) argues it is the distinctive capabalities of an organisations resource that are important in provididing it with competitive advantage ,i.e.reputation and product innovation. Although possessing distinctive capability or characteristic is important but it doesn’t not guarantee success fit is not sustainable and suitable which could be assessed over a period of time and if it primarily benefits the organization itself.

Johnson and Scholes, (2002) state that core competencies or distinctive capabilities provide an organization a basis to outperform its competitors, therefore it is important for organization to identify and develop the unique resources and core competencies to achieve competitive advantage as shown in the fig,(2.2.1).

Figure, (2.2.1): Core Competencies.

Easy to imitateDifficult to imitate
RESOURCESNecessaryResourcesUniqueResources
COMPETENCIESThresholdCompetenciesCore CompetenciesOrDistinctive Capabilities

Source: Adapted from Johnson and Scholes, (2002).

On the other hand ,Grant,(1991) distinguishes resources and capabalities. He goes on to state that resources are the sources of organisations capabilities and its capabilities that are the main source of its competitive advantage. The greater the rate of change in a firm’s external environment, the more likely internal resources and capabilities are to provide a secure foundation for long-term strategy (Grant, 2000, p.108). Grant proposes a framework as shown in the fig, (2.2.2) for strategy formulation comprising of five steps which are as follows

Identify and classify the organisations resources. Appraise strengths and weaknesses relative to those of your competitors and identify oppurtunities for bettre resource utilization.

Identify the organisations capabalities, i.e. what it can do better than its rivals and identify the resource and complexity of input to each capabalities

Appraise the profit-generating potential of resources and capabalities of organistion.

Select an appropiate strategy to expliot organisation resources in relation to the oppurtunities that exist in the external enviroment.

Identify the resource gaps which need to be filled,i.e. by investing in improving organistion resource base.

Figure, (2.2.2): Grant’s Resource-Based View of Strategy Analysis.

Source: Adapted from Grant, (1991).

Johnson and Scholes, (2002) state that it’s important that firm’s develop long lasting and durable strategic capabilities that provide advantage for long time in order to achieve sustained competitive advantage. They should also develop effective knowledge management and must be able to adapt and innovate in rapidly changing environment.

On the other hand, Barney, (1991) argues that all the resources that firm have access to may not be strategically significant, since some may prevent the organisation from conceiving valuable strategy. He states that a sustained competitive advantage occurs when an organisation is implementing value- creating strategy that is not implemented by potential competitors. He proposed that organization’s resource must have four attributes to provide potential sustainable competitive advantages which are as;

Valuable resources.
Rare resources.
Resource difficult to imitate.
No strategic substitute.

Although RBV provides broad insight about formulating strategy of an organization to gain competitiveness. However, it can be said that it says very little of how resource can develop and change over time. Priem and Butler, (2001) argues that resource based view of strategy lacks detail and is difficult for organization to implement. A more detailed road map is required if it is to be more useful to organizations.

a.EMPLOYEE RELATIONSHIP AND MOTIVATION:

According to the Armstrong, (1999) “employee relationships are the relationships that exist between the employers and employees in the work place”. Maund, (2001) states that relationship with employer and employees are very crucial for organization to be successful. It’s important for the senior managers to find out what employees are actually thinking. Armstrong, (1999) states that it’s important for management deal with the issues of sensitivity and demotion in order to gain the loyalty and trust from the employees. It also about getting that bit extra from the employees; that is the willingness to act beyond the job role. However Palmer, (2000) defines employment relationship as a relationship based on an (implicit) reciprocal agreement in which employees provide physical and labour in exchange for (economic and social) rewards supplied by employers. According to Kessler and undy, 1996(cited in Maund, 2001.p.324) relationship of employment consists of four dimensions, each which interrelate to form a comprehensive whole. These components are; Parties, Operation, Structure and Substance. However, Rouseau and Wade-Benzoni distinguish the relationship of employment between two types of contract; transactional and relational (Rouseau and Wade-Benzoni, 1994, cited in Maund, 2001.p.324). Building a trustworthy relationship with the employees is important in achieving the objective of an organization and sustaining growth which highlights the importance of HR strategy of the organization as well. On the other hand, Maund, (2001) states that employment development is another important factor in order to be successful. Ignoring people development and training is not an option for any organization, in order to get the best out of them it is important to invest in them as well. Armstrong, (1999) states that “employment development policy should express the organizations commitment to the continuous development of the skills and abilities of employees in order to maximize their contribution”. Maund, (2001) addresses that because of changing environment which places a unique demand on the skills and knowledge of people. It’s important for the management to provide training programmes and education in order to cope with these demands. Rewards and bonus programmes are also important in order to keep the employees motivated.

In the current economic scenario the motivation of staff is important and it is lifeline of an organization, however still on a business perspective it is an ignored area. Motivation should feature as one of the focal points when thinking about the functioning of an organization and should be given paramount importance by taking a clear and coherent approach. Mostly organizations turn a deaf-ear to motivation until its functioning is affected due to motivation. Orlando, (2002) states that motivation is a seminal element of peak performance and improving both internal and external facts of motivation is undeniably prerequisite for success.

Theories of motivation are largely grounded in the field of psychology however psychologists in turn rely on the philosophical tradition of theory building efforts. Two categories of motivation theories evolve from this starting point are content theories and process theories.

Content theories provide a link between individual needs and work rewards and offer perspective based upon the relative value people place on various rewards. Maslow’s Hierarchy of needs (theory of human motivation, 1943) is one of the earliest theories about motivation and comes into the category of content theories. The theory assumes that human beings always seek to satisfy needs both in social and working life. Maslow developed the concept of pyramid of requirements’ or hierarchy of needs and highlighted five hierarchical levels of human needs and discussed how the satisfaction of the basic need leads to the desire of acquiring and satisfying higher needs. Maslow’s theory states that humans can only progress through the five levels of needs as shown in the fig, (2.2.1.1) by satisfying each one in turn with the self actualization being the highest level in hierarchy, until ones safety and security needs are not satisfied, status based needs will have little effect. McClelland, (1961) theory of acquired needs also falls in to the category of content theories; his theory focused on needs similar to the higher order needs identified by Maslow. He specifically argued that individuals have needs for achievement, affiliation and power. Other theory which falls into the category of content theory is Motivation- Hygiene theory of Fredrick Herzberg( 1950), which says that there are two types of motivators, one type which results in the satisfaction with the job called ( motivators) and other one which merely prevents dissatisfaction called (hygiene factors) which include company policy and administration, supervision, status, salary. According to Herzberg, et al., (1959), Hygiene factors are those factors which do not lead to the higher motivation but without them there is dissatisfaction. Despite the huge significance of Maslow’s and Herzberg theories, they have received fair academic criticism. Maslow’s theory has been criticized as being static and descriptive and like Herzberg; it cannot predict behavior by analyzing needs.

Figure,(2.2.1.1): Maslow’s hierarchy of needs

Source: adapted from Maslow,(1943)

On the other hand, process theories take much dynamic approach by trying to analyze the thought process of individuals which affect their behavior. The two process theories which offer significant amount of implication for motivation in work places are expectancy theory and equity theory. According to Vroom’s theory of expectancy, (1964)the performance is a multiplicative function of motivation and ability. This theory is based on the belief that employee effort will lead to performance and performance will lead to rewards. Rewards may be either positive or negative. The more positive the reward the more likely the employee will be highly motivated. Conversely, the more negative the reward the less likely the employee will be motivated. Also this feedback from the company in form of rewards has a decisive effect on motivation (Van-Dijk and Avraham, 2004).

On the other hand Adam’s Equity theory (1963) defines that in an organization When people feel fairly or advantageously treated they are more likely to be motivated; when they feel unfairly treated they are highly prone to feelings of disaffection and demotivation (Bussinessballs, 2009). According to the equity theory which is considered as one of the justice theories, he asserted that employees seek and pursue the balance between the inputs they bring to the job and the outputs against the perceived inputs and outputs of others. So the basis of equity theory lies in the process of individual comparison. The benefits of being treated fairly by the company, in terms of the feedbacks and rewards for the hard work and dedication you have put in has a positive effect on your motivation (Harvey et al., 2003). The relevance of equity theory to motivation is that it explains a rationale for human behavior which is not tied into the hierarchies or to specific kind of individual drives. On the positive side, equity theory helps in explaining a potential list of factors which can lead to motivation. On the negative side, its basis as a theory of motivation places emphasis upon the managers whose task becomes that of changing the levels of reward to create the balance. This also takes into consideration the inputs (time, effort, loyalty, hard work, skill) you put into the job and the outputs (salary, employee benefit, recognition, esteem, achievements) you get from it but this theory goes on to say that these two factors alone decide the level of motivation of an individual as it also takes into consideration the comparison with an individual, who is in a similar scenario and of whom you think is quite relevant to you (referent). Similarly, such efforts by the organization improve performance and productivity of its human assets which in turn benefits the organization itself (Dawn et al., 2000). However, with the Equity theory it varies from person to person and also varies with the referent one has in mind as with this theory an individual only keeps comparison with other people in mind and completely neglects the amount of contribution the two have made and this leads to demotivation of the individual towards his job.

Motivation is therefore a driving force in every front of life and it pretty much decides your approach to a given task. According to the various theories given on motivation it is highlighted in every theory that the level of motivation of employees has a paramount impact on the organization. As Likert, (1967) has put forward in his Management Systems and Styles theory that for an organization to achieve maximum profitability, good labor relations and high productivity, every organization must make optimum use of their human assets.

b. RECRUITMENT PROCESS:

Maund, (2001) defines recruitment as a process of finding and employing individuals to carry out the tasks that need to be done within the organization. Dowling and Schuler, (1990) state that recruitment is a process of ‘searching and obtaining potential job candidates in sufficient numbers and quality so that the organization can select the most appropriate people to fill its job needs’. For organizations to be successful it’s important that they have effective and efficient members of workforce, as employees are the force of organization (Maund, 2001). Effective organizations use a strategic approach to recruitment and development of their staff with their recruitment strategy linked to their overall strategy in order to utilize their people as a sustained source of growth and competitive advantage (Hill, 2008). Fombrun and Devanna argue that organizations would find it hard to implement strategy if they were not intertwined with the appropriate HRM policy (Fombrun and Devanna, 1984. Cited in Maund, 2001). Maund, (2001) states that organization with the effective recruitment strategies have to key assets; they ensure that the potential of the employees is identified, developed and utilized and they use finance on its people who directly contribute towards achieving the goals of the organizations. It is suggested that recruitment procedure is to be based on a system approach which is necessary to carry out analysis of inputs, output, and environmental context of recruitment. Maund, (2001) suggests that the aim of the recruitment is to maximize certain critical concepts which are Validity, Reliability and Utility analysis. Hill, (2008) states that recruitment process is usually divided into three distinct stages.

Definition of requirements of staffing.
Attracting candidates.
Selecting the employee’s candidates.

Selection is the last part of recruitment; it’s when the organization decides who to employees. However, selecting is the most important part of the recruitment process. As Maund, (2001) states that at the end it’s about employing the right people for the right job. With IT industry demanding high knowledge and skilled consultants. It’s important that selecting process meets all the criteria’s; Qualification, skills, knowledge, abilities and personal qualities. Without the efficient workforce it’s hard for organizations to be successful as people are the most valuable resource for organizations to gain competitive advantage.


1. RESEARCH METHODOLOGY:

The aim of this research is to find out the main reasons for Nasim Consulting’s lackluster performance in the IT consulting industry. The initial hypothesis was that this inefficiency could be attributed to inability to efficiently retain customers. The following subchapters would outline the methodology used in testing this hypothesis.

Research philosophy:

The epistemological stance being adopted in this study is Interpretivism. According to the Saunders et al., (2007) “Interpretivism is an epistemology that advocates that it is necessary for the researcher to understand differences between humans in our role as social actors”. Easterby-Smith et al (2008) asserts that an understanding of the research philosophy being adopted in management research is useful as it helps clarify research designs, showcases the best research approach and it also aids the researcher in identifying, creating and designing studies which may not be consistent with their past experiences.

The heritage of this strand of ‘Interpretivism’ comes from the intellectual tradition of phenomenology. Phenomenology refers to the way people make sense of the world (Collis and Hussey, 2003). The positivist perspective, which focuses on observing and generalizing social reality, is not being utilized in this study. The reasons being that a positivist perspective would not help explain the inner feelings and attitudes of the staff within the organization. It would also not aim to understand or identify the actual point of view and concerns of individuals in the study. These reasons thereby make the positivist view an unviable approach in answering the aforementioned research question.

This Interpretivist’ view is synonymous with the Social Constructionist view expressed by Easterby-Smith et al (2008), in that the focus of research should be on people, individually or collectively. Research should be concerned on how people think or feel about certain occurrences. He further asserts that human action arises from their perception of different situations.

A major limitation of the Interpretivist view is that the researcher would have to adopt an empathetic stance by entering into the world of research and understanding the issues from the participants’ point of view (Saunders et al, 2007). Easterby-Smith et al (2008) also asserts that a non-positivist research is not objective, therefore qualitative results gathered could be interpreted falsely based on the reader’s point of view. This research stance brings into question, the issue of reliability, validity and generalisability of subjective methods of research. These issues have been addressed in this research and are illustrated in following chapters.

One method of securing the reliability and validity of a subjective research, as postulated by Collis and Hussey (2003), would be to adopt a befitting approach to research. Also as Saunders et al., (2007) argues, the Interpretivist’ perspective of epistemology highly suits the area of business and management research particularly in marketing and HR management. Therefore this study, which is centered around issues concerning management, marketing and HR would adopt a social Interpretivist perspective.

c.Research Approach:

Collis and Hussey (2003) state that any research method adopting an Interpretivist perspective should be inductive, as it represents the most appropriate approach to social science research. By adopting an inductive approach, Bryman and Bell (2007) postulate that the study would aim to answer the research question by generating alternate hypothesis that would focus on the importance of informal social relationships.

However, in as much as this study is based on an Interpretivist epistemological stance, there is still evidence of deduction. The deductive approach is the dominant research approach in natural sciences, where laws present the basis of explanation (Collis and Hussey, 2003). The deductive approach represents the most common view of the nature of the relationship between theory and research and results gotten from this approach are developed through logical reasoning (Bryman and Bell, 2007).

The purpose of this research is to discover why an occurrence is evident in a particular institution, and also to compare these occurences with already existent theory. This comparison is done so as to ascertain which theory has the most influence on their performance; therefore a mixed method approach has to be instigated.

Saunders et al (2007) therefore argues that a mixed approach could be instigated, whereby a deductive approach would be used initially to compare findings with relevant theories, and in instances whereby there is no relevant theory available to explain the findings observed, then an inductive approach would be used in order to explain these occurrences.

Based on these arguments, this study would adopt a mixed method approach. A deductive approach would be utilized in the formulation of a viable research question, and analysis of the findings. In the event that there is no apparent explanation for a finding, then an inductive approach would be utilized in formulating a hypothesis. As illustrated by Collis and Hussey (2003), the most distinctive feature of qualitative analysis is its emphasis on the interpretation that can result in confrontation of multiple realities.

d. Research Strategy:

This study involves the empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence; therefore, the most befitting strategy, as postulated by Robson (2002) is a case study strategy.

Robson (2002) asserts that the case study strategy would be useful if the aim of the study is to gain a rich understanding of the research perspective and the process being endorsed. Therefore as this study aims to understand the business process within Nasim Consulting and also the reason for their lackluster performance, then based on this argument, a case study would be most effective.

The case study approach has been attacked for its lack of generalisability and for the fact that they produce huge amounts of data, which allow researchers to make any interpretation they want (Easterby-Smith et al, 2008). Therefore Oppenheim (2000) argues that the case study lacks the ability to generate objective answers to questions asked. Robson (2002) in response to these criticisms, suggests that case studies should have a clear design, which is be tailored specifically to the research question.

Easterby-Smith et al (2008) further asserts that the case study strategy should be less concerned with issues of validity and generalisability, but more on uncovering rich data that could best explain the life and behavior in organizations and groups. These assumptions illustrate why the case study approach was chosen as a suitable strategy for this research.

Triangulation, as proposed by Saunders et al (2007), would be utilized in the course of this study. Triangulation is essential when the study aims to capture data using different data collection techniques. Therefore this study would aim to collect data using semi-structured qualitative methods and also focus group qualitative studies.

e.Time Horizons:

Saunders et al (2008) defines a cross sectional study, as a study that aims to research a particular phenomenon at a particular time. Whereas a longitudinal study, as defined by Adams and Schvaneveldt (1991), is a study that allows the research to observe people and events over a period of time.

Therefore since the aim of this research is to discover the effects of some organizational factors, within a time frame of 3 months, a cross-sectional study has been chosen. This is due to the nature of the case-study research strategy and also the time limit of this research. Saunders et al., (2007) states that research taken for academic reasons are likely to be time constrained and don’t not allow sufficient time for longitudinal study.

Easterby-Smith et al (2008) asserts that a cross sectional study, is mostly useful in survey strategies and also comparative researchers. However they may also be used for qualitative case studies. Saunders et al (2007) therefore concludes that case studies that are based on interviews, which are intended to be studied over a short period of time, should adopt a cross sectional study.

f. Data Collection:

i.Sampling Method

Based on the research objectives and the issues to be investigated, it would have been most appropriate if all population of staff within the organization were interviewed. However, due to the time constraints and resource limitations inherent in this study, a non-probability sample of the population was selected.

Saunders et al (2007) asserts that a non-probability sample is most often used when adopting a case study strategy. A non-probability sample, as described by (Oppenheim, 2000), is a sample in which the probability of each case being selected from the total population is not known. it is impossible to answer research questions or to address objectives that require statistical inferences about the characteristics of the population (Oppenheim, 2000). A non-probability sample is being adopted as opposed to a probability sample, in which the probability of each case being selected from the population is known and equal in all cases (Saunders et al, 2007).

Robson (2002) further asserts that non-probability sampling could still be used to generalize findings, but these generalizations would not be based on statistical grounds. Due to the qualitative nature of this study, a non-probability study would suffice (Easterby-Smith et al, 2008).

The population samples interviewed are in 3 different categories.

Firstly, 4 members of top management were interviewed regarding the corporate strategy, sales and marketing of the firm, client relations and also human resources. All these interviews were carried using a semi-structured format.
Secondly, focus group sessions were carried out with 4 members of support staff, while 3 another focus group was carried out with 3 highly skilled support staff

A purposive sampling method, as described by Saunders et al (2008), was utilized in the sampling of participants. This method requires the use of the researcher’s discretion in selecting cases that would be most suited to answer the questions raised. This form of sampling is often used when working with small samples such as in case studies (Neuman, 2000). Collis and Hussey (2003) further assert that the logic unto which the purposive sampling should be selected should be dependent on the research question and objectives.

The top management staff were chosen in this research because of their knowledge of the areas being investigated. The support staff and highly skilled staff were also chosen because they were also believed to have an opinion regarding the organization.

S/NParticipantsA.K.AInterview formatTOPIC OF DISCUSSION
1Head of Corporate strategyHOCSSemi-Structured interviewCorporate strategy, marketing strategy, sales and marketing and human resources
2Head of client operationsHOCOSemi-structured interviewClient operations
3Head of SalesHOSSemi-structured interviewSales and marketing
4Head of Human ResourcesHOHRSemi-structured interviewsEmployee recruitment, retention, motivation, training, development
54 Support StaffFGSSFocus GroupEmployee motivation, retention, training, development
63 Highly skilled staffFGHSFocus GroupCorporate strategy, employee motivation, retention, recruitment.

ii.Interviews

Semi – Structured Interviews

A semi-structured interview is a qualitative interview that is defined by a pre-set question guide. It aims to provide in-depth findings through informal discussions with participants (Collis and Hussey, 2003). This interview method was chosen over unstructured or structured interviews, because this study intends to answer the research questions by asking specific questions, but not so much (unstructured) that it generates useless data, and not so less (structured) so as not to miss out on any unanticipated information.

Easterby-Smith et al, (2008) states that in less structured interviews, the researcher is encouraged to make choices and ask further questions regarding which line of questioning they should explore further, and which lines of enquiry to discard. Saunders et al (2007) also advises that in semi-structured interviews, specific questions could be omitted during the course of the interviews, while in others; additional questions could be added if they are deemed relevant.

The interview themes in the semi-structured interview are in appendix. The themes utilized in this study were derived from the literature review, knowledge of the organization and its industry, discussion with workers at the organization and the dissertation supervisor. The themes are not a set of questions per se, but general discussions that the researcher intended to focus on, in a bid to find answers to the research question.

The meeting environment and atmosphere of the interview area were not so formal. Saunders et al (2007) asserts that semi-structured interviews that are not so formal are usually more favorable amongst senior management, as the reply usually tends to be confidential in nature. Also, an informal environment could act as an ‘ice breaker’, which would allowed the researcher to bypass the initial confidentially issues of the organization. This was helpful in discovering the underlying factors responsible for the firm’s lackluster performance.

The semi-structured approach also provided the researcher with the ability to probe answers. Answer probing was particularly useful in responses whereby more explanation was needed in order to fully understand the occurrences. This was very important especially during the interviews with top management, whereby some respondents were initially wary about voicing their opinions. Answer probing and an informal environment were tools that were utilized in forgoing these barriers.

Focus Group Interviews

Focus group refers to group interviews in which the topic is clearly defined and the focus is on enabling and recording interactive discussion between participants (Saunders et al, 2007). He further asserts that the main aim of the focus group is to focus on a particular issue, product, service or topic and create an environment of interactive discussions amongst participants.

Focus group sessions were used in this study. There were used to record the perception of highly skilled and support staff to issues such as customer retention and employee recruitment, training and motivation. Saunders et al (2007) states that focus groups typically involve up to 8 participants, depending on the information sought.

A non-probability sampling method was used in the selection of respondents. The interview method was non-standardized, as in the case of the semi-structured interview, but instead of having just one recipient, the focus groups had a number of recipients. 3 highly skilled staff and 4 support staff.

Easterby-Smith et al (2008) asserts that in cases whereby a focus group would be the most appropriate form of data collection, the role of a researcher would shift from the interviewer to the role of a moderator and facilitator. The researcher therefore had little input in the course of the focus studies, except for the occasional insertion of new areas to discuss. The aim of the focus groups was to ask the support staff and highly skilled staff for their opinion about the firm, its performance and their motivation to progress within the organization, if given the opportunity.

g. ANALYSIS OF RESEARCH FINDINGS

Quantitative and Qualitative methods are two methods mainly used in the data collection process of research. The former involves data that is either in the form of, or expressed as numbers while the latter involves collecting data in the form of words (Easterby-Smith et al, 2008). This study gathered only qualitative data, therefore the analysis of findings were based solely on qualitative methods of data analysis

Saunders et al (2008) states that it is possible to approach a research approach and analysis using either a deductive or inductive position. And the choice of analysis should be greatly determined by the research approach adopted. This study adopted a mixed method research approach, therefore in the analysis of findings, a decision had to be made as to whether to adopt a deductive or inductive data analysis stance.

Yin (2002) suggests that in studies whereby the research question has been formulated based on the literature review; these theories that have been used in the postulation of the research question could also be used in analyzing the findings. Thereby suggesting that a deductive approach to data analysis would be essential for theoretical driven studies. He also believes that an inductive approach to data analysis may be a difficult strategy to follow. Easterby- Smith et al (2008) further asserts that though a research might commence from an inductive standpoint, a deductive method of analysis does have its advantages. A deductive approach would link the existing body of knowledge in the subject area, it would also assist in getting the research started and providing the initial analytical framework.

Based on these arguments, this study analyzed its findings using deductive methods. The findings were analyzed according to the literature review topics discussed. In the instance whereby different respondents had something to say about a particular issue, all their opinions were recorded and taking into consideration in the analysis of findings. A fact sheet of all findings according to the theory is illustrated in chapter 4. Full transcripts of the interview are in the appendix.

The pattern matching procedure, as postulated by Saunders et al, (2007), would be utilized in this deductive analysis. It involves predicting a pattern of outcomes based on theoretical propositions. These propositions are thereby analyzed in the data analysis process. This procedure involves the development of an analytical framework, utilizing existing theory, and then testing the adequacies of the framework as a means of explaining the findings (Saunders et al, 2007). In the instance where a pattern is found as initially predicated, it would be evidence that suggests that there is indeed an explanation for findings.

This pattern only strengthens the previous deduction approach proposed. This study has built a pattern whereby it hypothesis that the main reason for the company’s poor performance is customer retention. Therefore the findings and literature review would shed light on whether this approach is viable or not.

h. CREDIBILITY OF RESEARCH FINDINGS:

i.Reliability:

According to the Easterby-Smith et al. (1991) reliability refers to the extent to which data collection techniques or analysis will yield consistent findings. There may be four threats to reliability which are ‘participant error’, ‘participant biases, ‘observer error’ and ‘observer bias’ (Robson, 2002). During the interview apart from the audio-recording, key notes were taken as well in order to maintain the richness of the data. To increase the reliability, interviews will be conducted in a professional manner by proper and effective communication in order to avoid any loss of data. However there is also an informal air in the environment, which allowed the researcher’s to feel more relaxed about voicing their opinions on corporate strategy or employee motivation.

ii.Validity:

Saunders et al., (2007) states, “Validity is concerned with whether the findings are really about what they appear to be about”. Robson (2002) further states that there are many threats to the validity of the research which are; testing, mortality maturation and casual direction. The research will be based on effective research design in order to avoid the threats to the validity. Interviews and questionnaire will be effectively and appropriately designed to examine and identify the appropriate findings. Multiple methods will be used in this research to provide better opportunities to answer research question and to evaluate the extent to which findings may be trusted. Also the researcher will be informed about any change in the strategy of the organization that might affect the area of investigation. Finally researcher is fully desired and committed to complete the research project within the given period of time.

iii.Ethics:

Blumberg, et al., (2005) states that ethics refers to the appropriateness of your behavior in relation to the rights of those who become the subject of your work. This research will be strictly conducted within the “Research Ethics Policy” of the ‘London metropolitan university’. The research will be designed in way that it is both methodologically sound and morally defensible to all those who are involved. Questionnaire and interviews will be designed in way that it doesn’t offend, harm or provoke anxiety or stress in participants. At the same time the objectives and academic expectations of the research will be fulfilled.

A number of other ethical issues have been raised with regard to this study

The top management of the organization were worried about their information getting into the hands of competitors who are equally lobbying for support contracts.
Other managers, support staff and highly skilled staff were particular about not being identified in the study, because of the sensitivity of the discussions.

Therefore based on these issues, this dissertation has been classified CONFIDENTIAL.

iv.Accessibility:

The researcher has been granted the right to access and publish the research finding from ‘MR. BASHARAT MALIK’ who is the managing director/owner of the Nasim Consulting.

This full access was used in arranging the semi-structured interviews with management and also the focus group interviews with support staff and highly skilled staff.

v.Limitations of Research

The following limitations were observed during this research.

The non-probability sampling utilized in the semi-structured interviews could have been expanded to include all staff within the organization. This approach would have further strengthened the reliability and validity of the findings. It would also have taken into account the perception of all staff within the organization. Thus resulting in indisputable data.
The participants which were interviewed could have been expanded to include some clients of the firm. Areas such as client retention could have been expatiated further if the opinions of the clients were put into consideration as well.
The data collection method could have been expanded to include quantitative questionnaires as well. If these questionnaires were included, it would have been possible for this study to quantify its findings, thereby making it objective and irrefutable.


3. RESEARCH FINDINGS

The results chapter has adopted a deductive analytical approach, therefore the findings of this study would be collated according to the research questions asked and theories read. The transcript from the semi-structured interviews and focus groups are shown in appendix.

The results are categorized according to the section under study and also according to the perception of recipients towards particular questions. All questions asked are also shown in appendix.

a.Market Based Factors

i.Brief overview of corporate strategy

Head of Corporate Strategy (HOCS)

The company’s main strength is in support services and these services are dependent on return customers. Therefore Nasim’s main strategy is focused on acquiring those resources that could help in retaining and servicing these customers. The HOCS also believes that due to the economic climate, it may be seemingly impossible to attract new customers. Based on this assumption, 80% of Nasim’s marketing budget is currently being diverted towards customer retention.

The generic strategy currently being adopted by Nasim is a low-cost focus strategy. The cost of Nasim’s services to its limited range of customers is lower than that of most competitors. Nasim’s immediate future strategy is to invest in customer retention. They intend to do this by lowering the cost of support services even further, especially for multi-year contracts.

A merger with another firm, or being acquired by a larger firm, are the only feasible strategies with which Nasim could diversify into the outsourcing market.

Focus Group – Highly Skilled Staff (FGHS)

Outsourcing is being supported as a viable diversification strategy, which Nasim could look into. Outsourcing commits clients to multi-year contracts and also increases clients’ switching cost.

New customer acquisition is also a recommended approach. Respondents from the focus group assert that old customers would not need to continue signing support services, if the installation process was very successful. Therefore Nasim should focus on the acquisition of new customers, as it is seemingly more profitable.

ii.Nasim’s marketing strategy

Head of Corporate Strategy (HOCS)

Nasim Consulting does not specifically target any customer segment. They provide broad range IT consulting services to any client that is interested in their products. Most of their previous customers are competing in the energy and telecommunications industry.

Strategy of focusing on support services was profitable prior to the economic downturn. Clients were able to order new installation services and signed yearly contracts that secured Nasim’s income. However this has changed, sales of new installations has dropped by 60% and some old customers are refusing to renew support contracts, citing a lack of need for it.

Head of Sales (HOS)

Marketing effort for acquisition of new customers is not so good. 20% of turnover comes from new customers and only 20% of the marketing budget is for the acquisition of new customers. Most of Nasim’s effort is bent on the retention of previous customers.

iii.Sales

Head of Corporate Strategy (HOCS)

Nasim currently provides outsourcing, installation and support services. 80% of turnover is from support services being offered to previous installation clients. 10% comes from installation services to new and old customers while the 10% left comes from outsourcing services. Sales of new installation services have reduced by up to 60%.

Head of Sales (HOS)

Sales of services are primarily done through the Internet. An online presence has been designed in which all the services being offered is listed. Therefore interested clients are advised to call.

Meetings are also set up with prospective clients through telephone, and consultants are sent out to outline the client’s problem and how Nasim could solve it. Brochures are also occasionally sent out to prospective clients.

However, the performance of the sales team is low. The sales team comprises of 4 staff that are equally responsible for customer relationship management. There are no training facilities that teach the sales team how to sell IT infrastructure, neither are there any added incentives apart from a little commission paid out for every sales made. Only 20% of the sales and marketing budget is currently being used for the main sales activities. The other 80% is used in retaining previous clients.

Proposals for sales and marketing campaigns have been previously dismissed. The company’s main focus is on ensuring repeat customers.

‘I would advise my company not to ignore sales and marketing completely; in as much as they are trying to attract the big firms and hook them up with support contracts, I think there are bigger fishes out there that have not been touched yet. These bigger fishes could attract more income through larger installation.’

Clients only need IT infrastructure when they have a budget or when they have a dire need for it. Clients can easily forgo installation and support services if they are cash trapped and need to focus on core business activities.

‘Therefore if senior management believes that their main bread lies with support services, then I beg to differ.’

If sales department received appropriate funding, investments could be made in acquiring competent sales and marketing staff, and also in the conceptualization of a new marketing strategy that aims to attract new staff and ensure their loyalty.

‘One main focus point I have is the need to build a brand. We have no strong brand, therefore we can easily be swept under the rug by bigger competitors who have a better name.’

iv.Customer retention

Head of Corporate Strategy (HOCS)

Most of Nasim’s corporate strategy is focused on satisfying the customer so that they invite the company again for the next job. Installation and support services being offered makes it easier for Nasim to satisfy return customers. However, customer retention is believed to be a major problem. The new strategy is therefore to get customers to sign multi-year contracts that could secure Nasim’s future.

Most of the corporate marketing budget is being utilized in the delivery of occasional free support, follow-up visitations and also in the recruitment and training of support staff.

Head of Client Operations (HOCO)

Nasim provides support services, and these services are based mostly on customer retention. However, to retain customers, these customers must need the services that they are being retained for. Not all IT solutions that Nasim provides actually need support services. Therefore, there is a better opportunity in new customer acquisition, than in customer retention.

b. Resource based factors

i.Acquisition of firm owned resources

Head of Corporate Strategy (HOCS)

Nasim has a long-standing alliance with larger IT companies who provide the infrastructure being installed to client sites.

‘Without these alliances, we would not have anything to install or support’

Nasim has gained experience in the field of installing IT solutions and providing support services. They have developed notable client relationships with the firms that develop the solutions, that Nasim implements and installs for clients.

Brand development is not currently a major priority for Nasim.

‘We believe a brand is more useful when targeting end-users and not necessarily business-to-business sales.’

ii.Recruitment process

Head of Corporate Strategy (HOCS)

Staff recruitment process is basically centered on staff that can maintain installation services.

Head of Human Resources (HOHR)

Nasim consulting basically recruits for middle management positions, highly skilled positions and also support staff positions. The basic recruitment strategy in Nasim is to fill the basic need. The basic need is for support staff that can maintain client installations. These staffs usually have the knowledge of the installation being supported, but do not necessarily have any higher IT skills.

Most highly skilled staffs are employed on temporary contractual basis. Installation services that come in for highly skilled staff do not come in as often as services for support staff.

‘Therefore it would be unfeasible to hire full-time highly skilled staff where the frequency of finding work for them is not yet secured and where their pay is very high.’

When new contracts come in, vacancies are put out to agencies so they could find candidates that meet the skills requirement required for the installation. This strategy is deemed to be effective and saves the company from monthly salaries, benefit packages and training and development.

Once projects are done, temporary contracts are not renewed if there are no further pending contracts.

There is currently no laid out career path where junior staff can easily advance in their career. All staffs (temp and permanent) are encouraged to apply, in the advent that a senior or middle management role does become available. Competent applications are given the opportunity of an interview. This process has been utilized in recruiting a number of middle managers.

iii.Employee relationship and motivation

Head of Human Resources (HOHR)

High turnovers of employees are witnessed in the firm. Most of these staff are recruited on temporary basis and are not needed after a project has been completed. Permanent roles do not witness that much turnover. However, a number of middle managers and support staff have left to work for competitors.

There is currently no profit sharing scheme available to middle managers, highly skilled staff or support staff. The only income gotten from the organization is yearly income, and commission paid to sales staff.

A profit sharing scheme, initially proposed as a tool required to increase motivation and reduce staff turnover, was dismissed.

Focus Group, Support Staff (FGSS)

Most support staffs are working in the organization because of scarcity of other jobs in the market.

‘The truth is, given the current job climate; we are either working here in support, or out there looking for a job. I am happy I have a job.’

Focus Group, Highly Skilled Staff (FGHS)

Most highly skilled staffs see the job as a stepping-stone. Focus is not on job satisfaction, but on getting the job done, getting paid and finding the next job.

Temporary work in a small IT consultancy is not seen as a career move. There is no perceived career path. The aim is usually to complete the job and look for further opportunities.

‘…Due to the fact that I have a broad range of IT skills, I believe I would be wasting my potential by staying in a small firm like this. I would be more suited to a firm that has a long portfolio of clients which everyday challenges. I would be more suited in an organization where there is a larger work to do, and immediate resources with which to perform these tasks.’ – Participant 1.

The lack of organizational, marketing and sales strategy is cited as a reason why some highly skilled staff would not be interested in taking up full time offer. The lack of an explicit career path is also cited as a reason why highly skilled staff would not be interested in working in Nasim for full time roles.

iv.Employee training and development

Head of Human Resources (HOHR)

There is no official policy on the training and development of staff. Support staff once recruited, are trained further based on the specificity of the infrastructure being supported. Highly skilled staffs on temp work are usually given the adequate support they require to complete their projects.

‘All temp staff are primarily recruited based on their suitability for the role, therefore there is hardly ever any need to re-train them.’

Focus Group, Support Staff (FGSS)

Support work provides little opportunity for promotion. Staff turnover within the organization, does not permit them to stay long enough to be considered for promotion. Permanent vacancies advertised are often given off to applicants from bigger firms.

Nasim is a small organization and the only service being offered is installation and support; therefore opportunity for progression within, is low. In order to progress, most participants believe that a move would have to be made , out of the organization, into a larger firm.

Support staffs do not believe they are being provided with adequate training and development. The only training being offered is how to support client installations and how to act in client sites.

Participant 4 – ‘I once asked human resources for a sponsorship to study my CCNA examination and it was declined. They said that I had not worked with the organization for up to a year and that the company does not currently have available resources to sponsor individual education forays’

v.Service quality

Head of Client Operations (HOCO)

‘Officially, I would state that service quality represents a core of our marketing strategy and that we intend to provide the best of services to all our clients. But realistically, I would confess that our service quality is archaic.’

‘Our main point of contact with these clients is through skilled temporary staff who want to get through with the job so they can start looking for another job and also through partially qualified support staff who are under trained and unmotivated. Therefore how exactly is service quality supposed to progress?’

There is currently budget for service quality. The only related budget is for the training of support staff. This training includes sessions where the staffs are advised on ways to deal with clients and adhere to client rules when at client sites.

‘They focus on retaining customers and selling support services but they do not teach the support staff how to cross-sell other installation services, neither are these support staffs motivated with any form of incentives incase they make a sale. Therefore what is the motivation to deliver service quality?’

The clients demand a high level of service. They expect to get value for money if they are to be committed to a one-year support contract. Support staffs are not adequately trained in the delivery of premium customer service to clients.


4. DISCUSSION

a.Research Aim

The aim of this study was initially to ascertain what resource based or market based factors were responsible for the poor performance in Nasim Consulting. The introduction and literature review pointed towards the fact that the performance may be as a result of the customer retention strategies the company was currently focusing on.

The following research question was therefore drafted, in order to ascertain the nature of this issue: ‘what resource based or market based factors are responsible for the success, or lack thereof, of business strategies in small IT consultancy firms. How can these factors be exploited in the development of sustainable competitive strategies?’

The main factors, based on the literature review, were therefore researched. These were the core factors on which the questions asked in the semi-structured and focus group interviews were based. The findings of the interviews, and also its relationship to existing theories would therefore be discussed in the following subchapters. A deductive analytical approach, as stated in the methodology chapter, would be utilized in the analysis. Analyzing the findings, based on their context in the literature review, would do this. The resource based and market based factors would first be analyzed, in a coherent way, and then possible ways in which Nasim could exploit these factors would be discussed afterwards.

b. Research discussion

i.Corporate strategy

Nasim’s low cost focus strategy has been described by the HOCS, as Nasim’s way of curbing the issue of customer retention. The intention is to target all available customers with low cost services. Their initial belief was that with low cost installation and support services, they would be able to attract a number of companies that are in dire need of IT solutions at affordable prices. However this strategy does not seem to be paying off, as they are not acquiring that many new customers and the customers they have served, are not repeating business as Nasim expects them to. This puts into question, the reliability of Nasim’s low cost focus strategy as a method of securing customers in IT consulting.

Porter (1996) asserts that for a company intending to be a low cost provider, the cost of each activity should be kept to a minimum, while still maintaining the threshold features that are required to compete effectively in the market. Miller and Dess (1993) also argue that in order to achieve cost leadership, firms must have achieved a relatively high market share, which requires capital investments in product R&D, manufacturing as well as aggressive marketing. Nasim does not currently have a large market share; neither does it have the resources to invest in product R&D or in aggressive marketing.

The competitive scope of the low cost focus strategy requires that any company pursuing such a strategy should focus on selected segments, group of segments, particular buyer groups or geographic market in the industry, by tailoring its strategy to serve them, thereby excluding others. Porter (2008) further asserts that a company can achieve and sustain focus strategies if it is able to develop a highly specialized expertise in satisfying a clearly defined group of customers. However, these arguments may not hold with respect to the current economic climate. Nasim’s high-end indirect competitors may be forced into price rivalry and therefore start competing on the same cost level as Nasim. Because of the economies of scale that these firms possess, they would be able to better service Nasim’s customers. Stonehouse et al, (2000) therefore argues that the low cost focus strategy does not lead to competitive advantage unless there is some form of differentiation.

A Possible strategy, which could be beneficial in retaining customers in such an industry, as discussed by the HOCS and FGHS, is outsourcing. Outsourcing involves multi-year contracts in which a large company outsources some or its entire IT department to an IT services firm, either locally or internationally. Outsourcing contracts involves the outsourced being reputable for delivering premium services; it also involves the outsourced acquiring all the required resources in order to emulate the services of the outsourcer.

Collis and Montgomery (2008) assert that good corporate strategy requires the continual assessment of the company’s scope, continuously evaluating how the company’s valuable resources may be upgraded or leveraged across changing markets. However the inability to upgrade or leverage core resources are two reasons why growth and diversification strategies are usually poor or unsuccessful in small companies.

Nasim may not be able to acquire the relevant resources, neither would it be able to leverage current resources. These limitations are due to its low-cost focus strategy, which is incompatible with the outsourcing industry. A change of generic strategy to achieve a ‘value focus’ status would require Nasim to employ competent staff, purchase required infrastructure and become a larger company. McGahan (2006) asserts that a merger with a similar firm, or acquisition by a larger firm, may be the most appropriate approach for a small firm trying to enter a larger market, provided it does not already have the resources to compete effectively in that market.

A value focus strategy would also be beneficial in the acquisition of new customers and retention of previous customers. By building value, through an effective marketing strategy and also through the acquisition of firm-owned resources, new customers would be attracted to an already established brand with an indigenous IT solution. Old customers would have a huge switching cost because the IT solution being provided to them is indigenous to Nasim consulting alone.

This customer driven strategy would therefore be concerned with meeting the needs of the Nasim’s actual and potential customers, and could result in delivering its major objectives, be it an increased customer base or profit (Hooley et al, 2004). Sustainable competitive advantage and long term profits could therefore only be achieved by attracting and retaining the right kind of customers (Doyle, 1997)

ii.Marketing strategy

A successful marketing strategy, as illustrated by Doyle (1997), involves the selection and analysis of a profitable and sustainable market segment, the development of an appropriate marketing mix, marketing the right brand and retaining these customers through an effective use company resources. This marketing strategy should be built on an understanding of the changing organizational environment, and how each industrial force impacts value creation (Porter, 2008)

Nasim’s marketing strategy, as expressed by the HOCS and HOS, is based on the assumption that the major issue facing Nasim is customer retention. This explains why most of their marketing budget is currently being diverted towards the alienation of that perceived problem.

Nasim’s marketing strategy is not specifically targeted at any one market. They have a broad based segmentation that is designed to attract all those who wish to patronize Nasim. Levitt (2008) postulates that the importance of defining customers lies in developing strategies that target them correctly and in ensuring that competitors have been properly identified. An inability to accurately define this segment would lead to competitors stealing customers without the company realizing it until its too late. Therefore, in order to attract customers, Nasim needs to understand the market segment in which they intend to compete, and then modify their marketing strategy and competitive positioning to fully exploit the market opportunity (Weinclaw, 2008)

The inability to identify a customer segment and target it specifically can explain why Nasim has problems with the retention of old customers and also with the acquisition of new customers. They aim to please a broad market segment, but end up with just a few customers who are with them because of the low cost of their services. Market segmentation and positioning are strategic capabilities that give the organization the ability to identify alternative opportunities in appropriate market segments. Segments where the firm’s core competencies could be most efficiently utilized (McDonald, 2008)

A firm focusing on a particular generic strategy should know who their intended customer is (Porter, 2008). Therefore Nasim, intending to focus on its low cost strategy, should have a customer segment in mind. If they intend to concentrate on low cost services, then they should identify the forms of businesses that may prefer low cost services, acquire the necessarily resources to specifically target them, then build a brand image around installation and support of those services.

iii.Customer retention

Hoffman (2006) asserts that firms engaged in customer retention work to satisfy customers with the intent of developing long-term relationships. Firms that mainly provide services to clients, are characterized by intense rivalry and minimal differentiation amongst competitors, therefore customer retention should be a leading strategy (Vavra, 1992). Dawkins and Reichheld (1990) also assert that increasing retention rate by 5% could increase the net present value of customers by up to 85%. However for the effectiveness of this strategy to be concentrated on, it must first be understood whether the customers are likely to be profitable return customers. Ahmed and Buttle (2001) assert that customer retention should be a very important business goal, as it has the potential for delivering substantial profits to firms in the long term. However, the choice of adapting a customer retention strategy is highly based on the product/service life cycle and customer’s buying behavior (Hooley et al, 2004).

The installation and support services industry has a low life cycle of one year for support services, and may not necessarily profit that much from customer retention, especially when the firm focuses on a low-cost focus strategy without any form of differentiation. The lack of viable efforts to attract new customers may result in Nasim losing income every time a customer’s contract terminates.

The HOCO believes that instead of focusing on customers who do not necessarily wish to be retained, a more suitable approach would be to focus on the acquisition of new customers. This notion has also been supported by the HOS. Berry and Parasuraman, (1991) support this notion, by arguing that the role of any firm’s marketing activities in the private sector, is to make profit, irrespective of how the sales are made. Therefore, an effective organization is one that is able to retain its customers and also acquire new customers. Fornell and Wernerfelt (1987) therefore assert that firms should emphasize their marketing resources on the retention of its most profitable customers, and also on the acquisition of new customers.

If Nasim generates 80% of its income from support services, which is not that profitable a service, then it illustrates that they may not necessarily be running a profitable business. More profitability lies in installation services that could provide increased cash flow and potential for growth. McDaniel (2006) therefore suggests that in order to initiate a CRM cycle, the company must learn who the customers are and where they are located. This information must be understood and used in the formulation of marketing strategies.

iv.Acquisition of firm owned resources

Collis and Montgomery (2008) state that a firm seeking to develop a sustainable competitive advantage could do so by investing in new resources, upgrading existing firm resources or leveraging existing resources in order to capture new markets.

Nasim, according to the HOCS, claims that apart from the long standing alliances with large IT companies that provide infrastructure, the firm does not currently own any indigenous firm based resources. A number of theorists (Prahalad and Hamel, 1994; Collis and Montgomery, 2008), suggest that for a firm to be able to compete effectively in any said market, the resources, upon which it intends to compete must be inimitable, durable, lack any direct threatening substitutes, have competitive superiority, have innovative capability, build on existing strengths of the organization and finally, it must be owned by the company and not the buyers, suppliers, distributors or any one particular employee.

The inability of Nasim to acquire indigenous firm owned resources, increases the threat posed by suppliers in that industry. McKiernan (2006) postulates that the supplier strength of an industry determines to a large extent the price and quality of the end product. It also defines the level at which a firm can differentiate its products from that of competitors (McGahan, 2000). Collis and Montgomery (2008) state that one of the main conditions for firms seeking to sustain competitive advantage in their industries is to have full ownership over their core competence. This would ensure that they maintain their competitive stance in the market. It also makes it harder for them to lose such a core competence through the transfer of relevant assets.

A major disadvantage is that if Nasim is totally dependent on its suppliers to provide IT infrastructure to install for clients, then this increases the switching cost for Nasim, as they cannot easily shift IT suppliers, however it reduces the shifting cost significantly for the buyers. The buyers can go to any other retailer offering a better price or deal and get the same infrastructure, as Nasim does not own it. And since the only reason for conducting business with Nasim initially, was mostly based on price, Nasim’s clients do not stand to lose anything by shifting.

This assumption has been expatiated by Collis and Montgomery (2008) who argued that the presence of an overwhelming buyer power in an industry could shift the value creation considerable towards the consumers and away from the industry players. Porter (2008) further asserts that the buyers could force down prices, demand better quality of products or services and could generally play industry participants against each other, all at the expense of industry profitability.

Firms should therefore aim to create value by designing corporate strategies in a way that it attracts and keeps these customers (McKiernan, 2006), thereby ensuring their brand loyalty and establishing a huge switching cost between the firm and its competitors (Porter, 2008).

The intensity of competitive rivalry in that industry could be calculated by ascertaining whether Nasim’s direct competitors are equally adapting a low cost strategy, investing in increasing their capacity (low cost differentiation) or increasing their value through branding and marketing (value differentiation). This would help quantify Nasim’s competitive stance, to see whether they could compete effectively by either increasing capacity or increasing value.

A company adopting a low-cost strategy should be able to protect its positioning with an effective low cost advantage (McKiernan, 2006). Low cost advantages are usually in the form of economies of scale in which the company can produce large amounts of products or services at reduced cost (McGahan, 2000). This advantage is essential in industries whereby there is intense price rivalry and the key factor for success is on being the provider of the cheapest services.

If Nasim were to only compete based on price without having a low cost advantage, then that reduces the switching cost for buyers and increases the intensive rivalry with its competitors. Bigger companies with more pronounced economy of scale, may attract Nasim’s customers because of a reputable brand, or an even lower cost.

Branding, as argued by Kotler (1997), is a very effective marketing tool, that could shift the competitive pressure of a company’s service away from price. The importance of branding in a firm’s marketing strategy is important in services that are indistinguishable from those of competitors (Zeithaml, 1988). Branding thus serves as the only factor which could help distinguish between services in a market, as the client would usually makes purchase decisions based on what they perceive about one product in relation to another (Kotler and Keller, 2009).

The lack of a recognizable brand image, though stated by the HOCS as not being a major priority, poses the greatest risk to Nasim’s future. The inability to compete on other factors apart from price is a huge threat that needs to be curbed before Nasim loses all its customers to competitors.

v.Sales

All results gathered with regards to the sales effort of the organization coheres with the fact that the company is currently neglecting efforts to acquire new customers, just so they could retain previous customers.

This strategy may be the reason why the sales of new installations has dropped to 60%, and 80% of turnover is as a result of support services being offered to previous clients. The 60% drop in sales could also be explained by Nasim’s mediocre marketing strategy in which most of the sales is primarily done through the Internet. Do large firms who intend to have installations go to the Internet to find low cost small IT firms to install for themOr do they seek firms with reputable dealings who can offer premium services at a moderate price?

This strategy may have worked out well in the past, maybe before the economic downturn. However, Ansoff (1984) warns that firms learning from successful models of its past could be a major obstacle in adapting to the changing organizational environment. Piercy (1997) also illustrates that detrimental effects could arise when firms continuously revisit outdated strategies as a method of developing responses to changing market situations. These arguments help emphasize the need for companies to respond to market change by continuously revising its strategies, thereby adopting a proactive approach to market opportunities and threats while still practicing reactive operational approaches to inevitable changes in its macro-environment and industry (Lynch, 2009).

Though Nasim specifically aims to maintain its customers, a marketing strategy, as defined earlier, with a defined positioning, brand image and dedicated sales staff would be sufficient enough to acquire new customers and also retain previous customers. The main point of the HOC, which was that clients only need IT infrastructure when they have the budget, or when a dire need has been aroused, should not be neglected. It may not be profitable to keep trying to retain customers who do not need the services being provided. The HOS is confident that with appropriate funding, a sales and marketing campaign could be devised. A campaign that focuses on the identification of Nasim’s true customers, retention of profitable customers, and also the development of a reputable brand.

A viable future approach may be that instead of focusing on support services for previous customers, efforts could be made to provide installation services to new customers.

vi.Service quality

This campaign, if formulated, should also take into account the service quality currently being delivered to clients. A reason why a low cost strategy may be unattractive to firms may be because of the quality of service received. Findings from the interview with the HOCO, illustrate that Nasim’s service quality is poor. There is a GAP between the customer’s service expectation and Nasim’s service delivery. This, according to Zeithaml et al, (2006) represents a GAP 2, in which management may be aware of critical customer expectations, however a variety of factors such as resource constraints, market conditions, management indifferent may prevent them from setting specifications or training relevant staff to meet those recommendations.

The main point of service delivery is through support staffs that have not been trained to deliver professional customer service to high-end firms. The lack of an appropriate level of service quality is unacceptable for most firms who outsource their IT infrastructure and also firms who bring in consultants to perform work on their systems. This could also be deemed a contributing factor to Nasim’s lackluster customer retention effort.

Another reason for the poor service quality lies in Nasim overpromising the clients of the service they can offer, especially when they do not have the resources to perform these tasks effectively. Zeithaml et al (2006) asserts that a GAP 4 is a situation whereby there is a difference between service quality promised, and service delivered. The inability of Nasim to deliver on perceived service expectations and also service promised, may also be attributed to its low cost focus strategy. This generic strategy, and the lack of a viable supporting differentiation, puts Nasim as a disadvantage when trying to acquire the resources required to deliver on promised quality.

vii.Recruitment process

Maund (2001) defines recruitment as a process of finding and employing individuals to carry out tasks that need to be done within the organization. Nasim’s recruitment strategy, as argued in prior subchapters, is aimed at satisfying its corporate strategy. So its recruitment strategy of hiring temporary highly skilled staff and permanent, low skilled support staff does correlate with its corporate strategy.

The recruitment of highly skilled staff might be considered by some to be an acquisition of firm owned resources. These staff could lend to the firm’s credibility and also strengthen their knowledge base. However, since they are only recruited on a temporary basis, then they are in no way owned by the organization.

Nasim’s strategy on employee recruitment does seem to be effective as it saves them a lot of cost. Hill (2008) postulates that an effective organization uses a strategic approach to recruitment and development of staff. The recruitment strategy is often linked to the overall corporate strategy in order to utilize staff as a sustained source of growth and competitive advantage. Fombrun and Devanna (1984) argue that organizations would find it difficult to implement strategy if they were not intertwined with an appropriate HRM policy.

However, Nasim’s strategy of employing staff mostly on temporary contracts has the side effect of de-motivating staff. Most of the FGSS claim to be at the job, because of the economy, in which they cannot get better jobs. The FGHS, also expatiated this stating explicitly that they would not like to take up full time offers, even if they were given the opportunity to.

A primary step, which the organization could use in the attainment of its organization goals, may be to start recruiting permanent highly skilled staff. This staffs are expensive, and therefore risky to the company’s cash flow. However, if this effort was combined with the marketing effort of targeting a niche market with specific indigenous services, then it could assist in enhancing Nasim’s reputation and eligibility to customers.

viii.Employee relationship and motivation

Armstrong (1999) defines employee relationships, as those relationships that exist between employers and employees in the work place. Maund (2001) further asserts that relationships between employers and employees are very crucial for organizations to be successful. Management should treat issues such as sensitivity and motivation in order to gain the loyalty and trust of employees (Armstrong, 1999)

According to the HOHR, there is low motivation amongst staff in Nasim; the lack of an organizational career path or recruitment strategy, like the other big IT consulting companies, may be possible reasons.

The high staff turnover could be easily related to the temporary contracts that most of incoming staffs sign up to. However Nasim has been unable to retain competent staff neither has it made any explicit effort to retain managers who leave to competitors. Is Nasim therefore focusing on retaining its customers, without putting that much effort on retaining its own staffIn organizations, especially start-ups and relatively small organizations, motivation of staff, though ignored in most cases, is important and represents the lifeline of the organization (Palmer, 2000); Companies usually ignore motivation, until one or more corporate functions are affected. Orlando, (2002) states that motivation is a seminal element of peak performance and improving both internal and external facts of motivation is an undeniably prerequisite for success.

The lack of appropriate motivational schemes within Nasim could also be a reason why this organization has failed to retain important staff. Palmer (2000) defines employee relationship as a relationship based on an implicit reciprocal agreement in which employees provide physical and labour in exchange for rewards supplied by employers.

According to Kessler and Undy, (1996), building a trustworthy relationship with the employees is important in achieving the objective of an organization and sustaining growth. Inexistent reward schemes in Nasim have resulted in a situation whereby most staffs working at Nasim, are only there because they cannot find a better job yet. This was uncovered with the FGSS. The FGHS also illustrated that they are only interested in working for Nasim because of the installation services they are providing and the added experience it gives them.

Most of the FGHS even professed to not being interested in full time job offers at Nasim if they were given the opportunity. That not only demonstrates how de-motivated these people are, it also expresses their attitude to Nasim as a business entity.

Motivation, as expressed by Maslow (1954), is therefore a driving force in every front of life, and it pretty much decides an employee’s approach to any given task. The level of an employee’s motivation therefore has a paramount impact on the organization (Maund, 2001). Likert (1967) therefore states that for an organization to achieve maximum profitability, they must make optimum use of their human assets. A strategy that Nasim has failed to develop and exploit.

ix.Employee training and development

Employee development and training has been deemed as an important factor that could facilitate the success of any organization (Armstrong, 1999). Accommodating this process of human asset development is essential, as it would aid organizations in getting the best of out their staff. Nasim does not currently offer any sort of training and development activities for staff, except those that are directly related to any project at hand. Therefore the likelihood of staff within Nasim being indebted to the company, after the company has paid for their learning, is therefore inexistent.

Maund (2001) also postulates that changing environments demand that employees within organizations be up to data on the skills and knowledge required to compete effectively in their industry. It is therefore important for management to provide adequate training programs and education to cater for these developments. The inability of Nasim to support, train and retain staff; also coheres with their inability to acquire resources that are indigenous to the firm alone. Therefore the threat of buyers, suppliers and competitive rivalry is therefore very high for Nasim.


5. CONCLUSION

In summary, all these factors do have a huge influence on the performance at Nasim. The most important being its low cost focus strategy. Relevant theories dictate that any firm pursuing a low-cost strategy should do so if it has an element of differentiation or if it has a low cost advantage. Both of which are inexistent at Nasim. Possible ways in which Nasim could exploit this shortcoming could by through the acquisition of firm based resources, which have the ability to shift its positioning into a narrow range, value strategy.

Nasim’s marketing strategy is based solely on customer retention. This marketing strategy, though understandable, is aiming for the right thing in the wrong market. Customer retention is not as profitable as customer acquisition in the IT consulting industry. Consulting companies get paid more for the installation of new services, than for single year support contracts. Therefore focusing solely on customer retention in this industry puts Nasim at risk of losing its potential customers to competitors. If Nasim therefore has no resources, focuses on customer retention of a few customers, competes on just price and only employs highly skilled staff for temporary jobs, then what is their competitive advantage?

Ways in which Nasim could effectively target a new customer segment and also aim to retain these customers are through effective brand marketing, acquisition of indigenous resources, improved service quality, a defined marketing strategy, and an improved human resource policy.

The motivation of staff within Nasim is perceived to be low. This was found out during the semi-structured and focus group interviews. The low motivation level is caused primarily by the lack of a viable career path, Nasim’s inability to provide training and development, the generic strategy being pursued by Nasim, and the firm’s recruitment strategy that focuses solely on temporary staff. This low motivation level results in the delivery of inferior service quality to customers, the lack of willingness for highly skilled staff to join the organization and also, the loss of important staff to competitors. Competitors that could provide all the services that Nasim currently fails to.

However, focusing on all these shortcomings, may be impossible as they require the investments of a huge amount of time and resources, therefore the following chapter would outline the most feasible and realistic recommendations, based on Nasim’s positioning, which could be exploited in the development of a sustainable competitive advantage within the industry.


6. RECOMMENDATIONS

Based on the discussions in the preceding chapter, the following recommendations have therefore been postulated for Nasim as a business entity and to Nasim, with reference to market research.

These recommendations would build up on the strength of the discussion in the prior chapter, and therefore aim to utilize the important factors, in the conceptualization of a sustainable competitive strategy for Nasim Consulting.

FINDINGS FROM INTERVIEWS

LITERATURE REVIEW EXTRACT

DEDUCTIONS

1

Nasim is currently adopting a low-cost focus strategy.

A company can achieve and sustain a focus strategy if it can develop a specialized expertise in satisfying a clearly defined group of customers (Porter, 2008)

A low cost focus strategy is not a viable strategy, given the intense rivalry and buying power in the industry. The creation of value may be a more effective approach.

2

Corporate strategy and marketing strategy currently emphasize customer retention

The choice of adopting a customer retention strategy is highly based on the product/service life cycle and customer’s buying behavior (Hooley et al, 2004)

There is more opportunity in acquisition of new customers, than there is in customer retention.

3

The only basis of competition and customer attraction is price

Firms should therefore aim to create value by designing corporate strategies in a way that it attracts and keeps these customers (McKiernan, 2006), thereby ensuring their brand loyalty and establishing a huge switching cost between the firm and its competitors (Porter, 2008).

Competing solely on price, in such an industry poses a great risk. Buyers can easily switch to competitors who have a cost advantage.

4

Support services generate 80% of all income. New installation and outsourcing get 10% each

Ansoff (1984) warns that firms learning from successful models of its past could be a major obstacle in adapting to the changing organizational environment. Piercy (1997) also illustrates that detrimental effects could arise when firms continuously revisit outdated strategies as a method of developing responses to changing market situations.

Prior to the economic downturn, there might have been success in the support sector, however the economic crisis showcases the need for the company to spread its market segment.

5

Nasim does not currently own any indigenous resource. IT solutions are owned by suppliers

Collis and Montgomery (2008) state that one of the main conditions for firms seeking to sustain competitive advantage in their industries is to have full ownership over their core competence. This would ensure that they maintain their competitive stance in the market

The acquisition of firm based resources would reduce the supplier strength and also increase switching cost for buyers. Thus increasing Nasim’s competitive stance.

6

Most employees are not motivated. High turnover rate and no clear career path

Orlando, (2002) states that motivation is a seminal element of peak performance. Improving both internal and external facts of motivation is an undeniable prerequisite for success.

There is a need for a change in HRM policy.

7

Brand development is not a priority. Marketing budget is for customer retention

Branding, as argued by Kotler (1997), is a very effective marketing tool, that could shift the competitive pressure of a company’s service away from price. The importance of branding in a firm’s marketing strategy is important in services that are indistinguishable from those of competitors (Zeithaml, 1988)

If Nasim intends to differentiate itself from competitors and make itself more attractive to prospective customers, then efforts should be made to build the brand image of Nasim, just so it communicates to everyone and attracts the desired market segment.

8

Staff trained only for support purposes. No training for staff development.

Employee development and training has been deemed as an important factor that could facilitate the success of any organization (Armstrong, 1999). Accommodating this process of human asset development is essential, as it would aid organizations in getting the best of out their staff

Training of staff is crucial to staff development. It provides motivation and also enhances the knowledge and ability of the staff.

a.NASIM

Based on the literature review, research findings and the deductions in table *. These are my recommendations:

A new campaign, nicknamed Shift (for the purpose of this study), should be set into motion for the attainment of a narrow range value strategy. This entails the definition of a suitable market segment, the positioning and re-alignment of the firm’s resources to fit into that segment, and then the formulation of a marketing strategy to specifically communicate Nasim’s abilities to that market segment.
Once Shift is in motion and a viable customer segment has been identified, all the resources within the organization should be evaluated against the requirements for that industry (ies). Resources that are not needed, or whose specifications do not closely match should be discarded, while new resources could be acquired that could specifically target that segment.
Emphasis should be placed on the acquisition of new customers, in as much as the retention of old customers. This should be done by commissioning dedicated sales and marketing task force, this task force would be part of the Shift campaign, and would be dedicated to the acquisition of new customers.
Once the Shift campaign has identified its customer segment and also set up a sales task force, efforts should be made to develop bespoke services that specifically match the requirements of these customers. Bespoke services would result in the clients being dependent on Nasim, thereby increasing their shifting cost. It would also reduce the threat of suppliers within the industry.
Impetus should be placed on service quality. An effort should be made to train staff on Nasim’s attitude towards customers; this should be communicated to all support staff and highly skilled temporary staff working over at client installation sites.
Brand development should be a corporate priority. Without it, price is the only factor on which Nasim’s services would be judged.
A dedicated HR policy that focuses on employee motivation, reward systems, training and development should be put into action. Its major objective may be to recruit a number of competent highly skilled and support staff that would participate in the Shift campaign.

b. MARKET RESEARCH

Surveys should be carried out with all of Nasim’s staff, this should be done so as to confirm whether the lack of motivation amongst staff is truly common amongst all support staff and high skilled staff. The findings could assist Nasim in drafting human resource procedures to help tackle this issue.
Semi-structured interviews could be carried out with Nasim’s customers, both recent and former. In order to know why the present customers are staying, and why the former ones left. It would also be useful to ascertain the perception of customers to Nasim’s service delivery.
If Nasim intends to concentrate on its Shift campaign, then a survey should be carried out on a probability sample of all businesses in which Nasim could efficiently tailor its resources. A survey of this magnitude would put into account the needs of these customers and how Nasim could specifically target that need.


c.REFERENCES


7. APPENDIX

Categories
Free Essays

Free Strategic Management Essay: IMAX

1. Introduction

Harberber and Rieple (2008) define strategy as a set of intentional or inadvertent set of actions through which an organization develops the required set of resources, efficiently target valuable customers, meet financial targets and competes effectively. These strategic decisions drive the long-term direction of the organization, the scope of its activities, help gain advantage over competitors, and address changes in the business environment.

The case of IMAX begins in 1994 when business partners Gelfond and Wechsler decided to purchase the organisation from its original owners and take the company public. IMAX operates in a people oriented business, operating within the entertainment industry. Through the years the owners have made strategic efforts in the direction of reaching new audiences. These efforts, in addition to IMAX’s external environment, will be analysed and explored in the sections that follow. The result of this analysis will be the comparison of the firm’s strategy with the identified industry survival and success factors, in a bid to ascertain the relevant factors that would drive future growth.

2.IMAX’s business environment

A number of theorists, notably Michael Porter (1979) have developed several frameworks for understanding and analysing the effect that an organization’s external environment could have on its competitiveness and profitability. These frameworks identify the following as notable forces: Threat of new entrants; Threat of substitutes; Bargaining power of suppliers; Bargaining power of buyers; and Intensity of rivals. This model has updated by Haberber and Rieple (2008) to include Complementary forces, identifying industries that indirectly affect one another.

Applying these 6 forces to IMAX, it becomes evident that the greatest threat to new entrants is the high capital investment and technical know how required to enter into the equipment distribution, production and distribution industry. Also, with respect to distribution channels, IMAX has been able to establish partnerships with cinemas globally (Firn and Alpeyev, 2010; MarketWatch, 2010) to showcase its films. In addition IMAX has either partly or fully owns (e.g. David Keighley Productions) companies specialising in the pre and post-production aspects of its business. However, the proliferation of cheaper digital film production and 3D equipment technology may significantly reduce that threat in coming years.

In relation to substitutes to IMAX, the analysis focuses on possible alternatives such as: DVD’s, pay-per-view, video on demand, theme parks, sporting events, and other alternatives to movies. MPAA (2009) reveals that in 2009 theme parks were observed to be the largest substitute threat to the movie industry. The buyer propensity for such substitutes is said to be moderate in the fact that IMAX films are generally one-of-a-kind and cannot be easily reproduced, also the lower prices of movies have been considered as a major reason why it would always outsell theme parks and sporting events (Bangkok Post, 2010) IMAX’s in house equipment manufacturing, long term relationship with suppliers, use of firm owned technological resources, and number of patents, significantly reduces the bargaining power of suppliers.

With the advent of the recession and the volatile financial environment, customers are becoming increasingly sensitive to price changes. IMAX is not immune to this change. IMAX’s product differentiation allows it to be one of, if not the only, supplier of its particular products. However, the vertical integration practised by the industry’s major buyers, are gradually increasing their buyer power. IMAX’s major customers are developing their own large format and 3D technology (Georgiades, 2010), which may pose a significant threat to the future of IMAX if they decide to stop relying on its technology. It would also increase their bargaining power if they intend to renegotiate their existing contracts on the basis that they can now provide competitive quality on their large format and in house 3D formats.

The largest threat however is the nature of competitive rivalry. Movie production studios are releasing more movies in 3D format, which could pose a threat to IMAX’s inhouse collection of large format 3D documentaries (Georgiades, 2010a). Its buyers are vertically integrating to build their own large format screens, and it is possible for them to start selling it to competitors (Pacher, 2009). The success rate of movies in the market also makes it increasingly difficult to turn a significant profit on every movie featured in IMAX screens.

However, the industry is experiencing growth. Though it is increasingly becoming mature in US/Canada, Worldwide box office revenue has increased steadily in recent years (as seen in figure 1). Growth was experienced in all regions of the world, especially Asia Pacific and Latin America (MPAA, 2009). According to Georgiades (2010), the recent growth of the movie industry has been driven by the introduction of new technology, particularly large format screens and 3D, through which viewers can have a new immersive movie experience.

Figure 1: Worldwide Box Office ($ Billion). Source: MPAA (2009)

Pachner (2009) stated that the movie industry was increasingly becoming matured and declining, as a number of cinema attendants would prefer to wait for DVD releases, however this has changed with 3D technology. The recent success of the movie Avatar is a testament to the increased demand for new technologies such as CGI and 3D (Firn and Alpeyev, 2010). 3D viewings have also increased considerably within the past few years and now constitute 11% of total domestic box office within the US and Canada, thereby illustrating the explosive growth the industry is facing (MarketWatch, 2010)

Haberberg and Rieple (2008) in their description of the Industry Life Cycle model, state that an organization experiencing growth is usually tasked with potentially increasing competition, profitability, need to differentiate its products and market awareness. These are increasingly becoming evident in IMAX with reference to competitors, buyers and moviegoers.

Following the analysis of the business environment in which IMAX operates the following key factors for success have been identified:

1.Competitive advantage through product differentiation and specialisation (one-of-a-kind product)

2.Market leader through strategic alliances

3.Technological prowess (new technologies, patents, etc.)

4.Value as an educational resource

3.Analysis of IMAX’s strategy

The most recognised resource of IMAX is its intellectual capital associated with the company’s technological superiority and patents. The technology used to shoot and produce an IMAX film is highly sophisticated and technical. Much of the technology used has been developed in-house and IMAX is seen as an expert in such advancements. Gelfond, in a statement regarding vertical integration by buyers explicitly boasts “It took a hundred million dollars in R&D to build the Imax brand and create the Imax experience… I think putting an ‘X’ in a name and building a big screen doesn’t recreate the Imax experience” (Georgiades, 2010)

IMAX’s core competencies also exist in its external and internal linkages with its suppliers and distributors. Good relationships exist between sales and procurement that lead to enhanced capabilities in new product development. IMAX’s is able to benefit heavily from its relationships with companies such as AMC and Regal. The company’s specialised capabilities in technology can also be seen as a core competency. According to Johnson et al (2008), sustainable competitive advantage is achieved by developing durable strategic capabilities that provide advantage over time.

IMAX’s major competencies, being the relevant and industry leading proprietary technology in large format screening, digital conversation and 3D screening are valuable and rare, and equally non substitutable. However, they can be imitated. Technological improvements have made it possible for theatre chains to install their own large format screens. It has also made it possible for producers and distributors with low cost to produce and edit movies. Though IMAX may claim to have built a brand and acquired patents over the years, consumers can easily opt to watch competitor’s formats for cheaper prices. These competitors would be happy to install this technology, as they are also not bound to revenue sharing agreements, thereby posing a reasonable threat (Georgiades, 2010).

The company’s foray into 3D technology, and conversion of Hollywood movies into large 3D format has severely eroded its previous niche market and focus differentiation generic strategy. Its increasing focus to retrofit theatres with relevant technology, instead of concentrating on its predominant edutainment strategy, could be an opportunity and a threat. This new found broad based product differentiation strategy (Ormanidhi and Stringa, 2009) would attract a new segment of moviegoers as seen in figure 2, but in the process it may lose its following of school children and edutainment focused individuals that have come to associate its brand with large format educating documentaries. By adopting this strategy, IMAX may also lose out on the new wave of educating and entertaining documentaries that parents are likely to invest in for their children’s intelligence. Joanna Pachner (2009) also argues that IMAX risks losing its brand image by changing its positioning and segmentation strategy.

Figure 2: Moviegoer demographic in US/Canada. Source: MPAA (2009)

However, a brief overview at its financial figures illustrate that IMAX has returned to profitability after 3 – 4 years of accrued losses, huge debts and negative cash flow balances. The company has also reduced its total liabilities from $325 million in 2008 to $202 million in 2009. Gross profit margin increased by 10 percentage points to 46.54%, while net profit margin was 3% from a negative in the past 2 years Over 40% of its revenue ($80 million plus) was derived from revenue sharing agreements and digital remastering services offered to theatres and studios (IMAX, 2009). These figures are testament to the effectiveness of its new product differentiation generic strategy, broad based segmentation of premium seeking moviegoers and re-positioning as an intermediate company that provider’s premium viewing experiences. Adopting both strategies, with a defined diversification, may result in the company being “stuck in the middle”, which according to Ormanidhi and Stringa (2008) would be counterproductive.

Figure 3: IMAX Revenue and Net Profit. Source: IMAX (2009)

4.Combining both factors

The analysis of the business environment, and that of IMAX’s core competencies and segmentation strategy illustrates that the company has found a niche for itself in an otherwise very competitive industry, and is increasingly leveraging its reputation, technical know how and intellectual capacity to take advantage of the growing demand for its products and services. Its resources are valuable, rare and cannot be substituted easily; therefore it has an advantage through product differentiation and specialisation. It has a widely known reputation for providing premium viewing and its large format 3D screens are sought after, it has acquired patents and invested in research over the years, thereby accumulated the required technological prowess to outshine competitors. The increasing number of cinemas it has built recently gives it a market leading position in strategic alliances, whilst its declining, yet substantial range of edutainment documentaries, still positions it as an educational resource.

However, increasing competition, technological proliferation and imitable resources pose the most significant threat to its sustainability within the industry. Its present value chain (Haberberg and Rieple, 2008) however poses as a significant advantage for IMAX. The company’s staff is knowledgeable and well trained about products, suppliers are controlled and have lower bargaining power, whilst financing, may be an issue of the past as the company gradually becomes profitable again and reduces debt. Its 3D technology is exactly what consumers want, these products are supplied individually worldwide, the existing brand, reputation and consumer acceptance of the product are great marketers, whilst the company has a effective after sales service, keeping systems running 99.9% of the time. These value chain factors make it possible for IMAX to pursue its product differentiation strategy at a low cost, and achieve widespread recognition and profitability.

5. Conclusion

In today’s competitive environment it is important for companies to identify their fit in an industry and capitalise on its competitive advantages. IMAX’s current resources are strategically positioned to achieve the key industrial success factors. It has been able to establish itself as a distinctive brand within the movie and entertainment industry. Through the strategies identified, it is suggested that IMAX can increase and grow its brand for many years to come, albeit with a recognition of threats to the company and its industry.


6.REFERENCES

Bangkok Post (2010) Imax leads the big screen comeback, http://www.bangkokpost.com/entertainment/movie/35862, [accessed: 12/04/10]

DeWit, B. and Meyer, R. (2004) Strategy – Process, Content, Context An International Perspective. 3rd edition. Thomson Learning: London.

Firn, M., and Alpeyev, P. (2010) Imax to Boost Number of Screens in Japan over 2 Years, http://www.businessweek.com/news/2010-04-20, [accessed: 12/04/10]

Georgiades (2010b) Regal’s Large-Format Theater to Complement IMAX, http://online.wsj.com/article/BT-CO-20100408-710727.html, [accessed: 12/04/10]

Haberber, A., and Rieple, A. (2008) Strategic Management: Theory and Application. Oxford: Oxford University Press

IMAX (2009) Financial Reports – 2009 Annual Report, http://www.imax.com/corporate/investorRelations/financialReports/, [accessed: 12/04/10]

Johnson, G., Scholes, K., and Whittington, R. (2008) Exploring Corporate Strategy. 8th edition. FT Prentice Hall.

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Free Essays

Sample Technology Essay: Knowledge Management at Thomson Reuters

ABSTRACT

This paper aims to evaluate the effectiveness of an online portal (“Learning Exchange”) as a tool in promoting knowledge sharing at a leading market information firm – Thomson Reuters. The company was having problems with the flow of knowledge amongst different departments across several countries, therefore as the several theorists suggest, a knowledge management system in the form of an intranet was implemented in a bid to promote knowledge sharing. Results obtained from a colleague working within the organization reported that the Learning Exchange has not been as successful as planned due to the low level of trust following the merger, employee unwillingness to share and also the competitive culture that is usually the norm in Knowledge companies, thus confirming several theorists’ view of the reasons behind intranet sharing failures. A new corporate wide initiative is therefore proposed, to minimize the predominant competitive culture; engage all users in the knowledge management system; and to include an increasing number of relevant information on Learning Exchange.

Keywords

Knowledge management, Knowledge sharing, Thomson Reuters, Intranet sharing, competitive advantage, market information industry, organizational effectiveness.

1. Introduction

a. Organization and Industry

The global market information industry, dominated mainly by Bloomberg (33%) and Thomson Reuters (34%), has been described as a duopolistic market that may determine the future trend in global businesses. Drucker (2001) reports that attainment of competitive advantage is increasingly focused on the possession of information and knowledge, as opposed to capital and labour – the norm in previous decades.

Thomson Reuters is a global market leader in market information, following the merger between Thomson Financials and Reuters in 2008. It is headquartered in Canada, and operates in 93 countries with over 50,000 staff (Thomson Reuters, 2009). 2008 revenues were ?13 billion.

Employees who work in the market information industry are composed mainly of journalists, market analysts, and technology professionals. All three occupations are composed mainly of knowledge workers. Therefore presenting the best opportunity to ascertain the effectiveness of knowledge management systems in such an industry.

b. Aims and Objectives

This paper aims to evaluate the effectiveness of an online portal (“Learning Exchange”) as a tool in promoting knowledge sharing amongst those that know, and those that don’t, at leading market information firm – Thomson Reuters. Has the intranet tool that was implemented, really done its work in promoting collaboration amongst employees within the organization, and if so, how was that achieved?

The importance of this paper lies in its unique approach to the culture within the organization and its aim of drawing up recommendations that could result in substantial benefit to the knowledge management industry.

c. Nature of the issue

Thomson Reuters, an information company, was having problems with the flow of knowledge amongst different departments across several countries. Evaluating such a question, especially within a global organization, could lead to innumerable results regarding the overall effectiveness of such approaches in that industry, and could set footpaths for recommendations which could change the methods in which such platforms are implemented in the future.

Though my eventual findings are not certain, preliminary literature research clearly outlines that the success rate of any Knowledge Management Intranet system is based on the culture of the organization (Ruppel and Harrington, 2001), willingness of staff to accept the application (Goh, 2007), and integration strategies put into place that would encourage all stakeholders to use the intranet (Goh, 2007).

d. Paper Structure and Research Limitations

In order to verify or discredit such assumptions, this paper would be structured in a way such that it discusses the organizational and industry background in Introduction. Theories relating to knowledge management and sharing would be discussed in the literature review. A methodology section would outline the main procedures within which the author has gathered the data, and the analytical strategy being adopted, while the results and discussion chapter would compare the results from the organization against existing literature. Recommendations and Conclusions would be outlined in following chapters.

The major constraint that this paper may encounter, would be gaining access to the core knowledge workers whose information would make the Learning Exchange intranet very effective. What are their views regarding sharing their knowledge within the organization?

2. Literature Review

a. Knowledge in Organizations

Knowledge, as defined by Ajayi and Leidner (2001, p109), “is the information processing that takes place in human minds, as well as personalized information related to facts, procedures, concepts, interpretations, ideas, observations and judgements.”

Knowledge is a critical resource within organizations that may be used to gain and maintain competitive advantage (Drucker, 2001). There is therefore a high impetus for organizations to “exploit effective and efficient methods of preserving, sharing and reusing knowledge in order to help knowledge workers find task-relevant information” and also to help hedge the company against future uncertainties in the changing marketplace (Lai and Lui, 2009).

Nissen and Levitt (2002) assert that knowledge is unevenly distributed within most enterprises; therefore the flow of knowledge across time, location and departments is critical to organizational effectiveness and performance within a knowledge-based view of the firm. Data and Information may be in abundance within an organization, however the degree to which these result in actionable strategies depend on the level of knowledge being shared in the organization, as illustrated in figure 1 below (Ipe, 2003).

Figure 1: Knowledge Heirarchy, Source: Nissen (2002)

Data lies at the bottom level and is usually the most abundant resource within an organization, with information at the middle and knowledge being the least available resource (Nissen, 2002). Therefore the higher the collective knowledge base of the organization, the more effective it would be with strategies that properly utilize this core competence (Ipe, 2003). Argote and Ingram (2000) further argue that knowledge that is improperly distributed within an organization is of little importance, and for knowledge sharing to occur, some sort of mutual platform must be present that engages all individuals in the process of knowledge sharing.

b. Knowledge Management and Sharing

Knowledge Management is concerned with exploiting and developing the knowledge base of an organization with the aim of accomplishing the organizations main objectives (Rowley, 2000). Knowledge sharing, defined as the process in which employees diffuse and share relevant information amongst each other within an organization (Bartol and Srivastava, 2002) has been categorized as the most important part of Knowledge Management (Bock and Kim, 2002). The main aim of sharing organization knowledge is therefore to transfer organizational assets and resources between entities in an organization in order to promote streamlined processes, prevent repetitiveness (Dawson, 2001) and gain competitive advantage (Drucker, 2001).

Knowledge sharing plays a very important role in a company’s performance and innovation; the willingness to share knowledge within an organization is dependent on the focus of the organization, be it:

Job guarantee,
Individual performance,
Team performance or
Team learning (Meng Hsun et al, 2006).

Empirical evidence shows that the motivation to share knowledge is highly dependent on the team culture within the organization, and is highest with the team learning culture, whilst lowest with those companies laden with individual performance guarantees. Figure 2 below is a pictographic representation of Nissen and Levitt’s (2002) factors that affect knowledge sharing behaviours.

Figure 2: Factors that affect knowledge sharing behaviours. Source: Nissen and Levitt (2002)

Huysman and Wulf (2006) noted that individuals might not necessarily opt to share their knowledge in all situations, even if it’s an organizational requirement. Foss et al (2009) also states that an individuals decision whether or not to share knowledge is highly influenced by the benefits and costs associated with each option.

c. Promoting Knowledge Sharing

Knowledge exists at different levels within the organization, and may be subdivided into individual, group or department level knowledge bases (De Long and Fahey, 2000), therefore an organization’s ability to effectively leverage the knowledge of these subdivisions in accomplishing an organization wide objective is highly dependent on its people and the culture within which the knowledge is created, shared and used (Ipe, 2003). Leveraging this knowledge could result in improved streamlined processes, such as those in a knowledge flow hierarchy as depicted in figure 3.

Figure 3: Knowledge flow hierarchy, Source: Zhuge (2002)

According to Ipe (2003) knowledge sharing within organizations is highly contingent on the following factors:

Nature of the knowledge
Motivation to share
Opportunities to share, and
Culture of the work environment

Figure 4: Knowledge sharing triangle, Source: Ipe (2003)

The methods by which these factors influence one another in promoting knowledge sharing are depicted in Figure 4. The capacity by which these factors influence organizational knowledge depends highly on the business objectives of the organization, its structure, business processes, rewards systems and culture. The organizational culture has the most influence on the other three knowledge-sharing factors, as it determines to a large extent, how and what knowledge is valued, relationships and rewards associated with knowledge sharing, and also the formal and informal facilities and opportunities that stakeholders have to share knowledge (Ipe, 2003).

Bresman et al (1999) asserts that the essential part of knowledge management is the transfer of knowledge across business units, hierarchies, countries, sister units and multicultural environments. Organizations may therefore encounter setbacks with regards to an increase in geographical and cultural distance within the organization. Meng Hsun et al (2006) also asserts that firms may encounter setbacks due to neglecting human nature and the knowledge trading mechanism within the organization. Foss et al (2009) also supports this assumption by stating that an employee’s attitudes and competencies may impede knowledge sharing. Some are ignorant of the importance of sharing knowledge whilst others possess an unwillingness to share that may be due to fear of losing importance, superiority or knowledge ownership (Zhuge, 2002).

However, the notion that an individual’s motivation to share is the main determinant for knowledge sharing has been challenged by Hislop’s (2003) study. The results of the study, illustrate that the most important determinant in an employee’s willingness to share, is the employee attitudes towards sharing. Employees working within the sales department of an organization may not be as willing to share knowledge, compared to those working in Marketing.

In a bid to curb the negativity associated with Knowledge Sharing, Lin (2006) discovered that the following motivational factors were significantly associated with employee knowledge sharing attitudes:

Reciprocal benefits,
Knowledge self efficacy and,
Enjoyment in helping in helping others.

De Vries et al (2006) also noted that eagerness and willingness to share are both positively related to knowledge sharing within an organization. Lin (2006) however asserts that expected organizational rewards do not significantly influence employee attitudes and intentions regarding organizational knowledge sharing. This finding therefore raises the question of what organizations can do to promote a knowledge sharing culture, if objective rewards have no significant effect.

d. Knowledge Sharing through Intranets

Drucker (2001) nominated the ability to gather and utilize knowledge as an important source of sustainable competitive advantage within an organization. A number of organizations have therefore begun pursuing knowledge management initiatives and making substantial investments in knowledge management systems that encourage a mutual culture of knowledge sharing behaviours (Hahn and Wang, 2009). While knowledge sharing may constitute a number of factors and requirements, a technology-mediated environment is one of the most important promoters of a knowledge sharing culture (Carlson and Davis, 1998).

Knowledge management systems are increasingly being deployed through intranets Foss et al (2009). Intranet KMS are knowledge networks with multiple points of entry maintained in a centralized location. Information could be created by, and is available to, all employees within the organization (Chin, 2005).

While the possibilities for intranet applications are innumerable, it is still classified as just the backbone for knowledge sharing. The success of any Intranet based KMS is based wholly on its adoption (Ipe, 2003). Successful KMS reflect the organization’s willingness and ability to share knowledge amongst each other, and the knowledge sharing culture within the organization. Unsuccessful knowledge sharing initiatives are not necessarily due to the intranet system, but the culture of the organization and employee’s willingness to share (Chin, 2005)

Chin (2005) further asserts that each knowledge management system has to pass through three main hurdles for it to be successful:

The technology used to implement and support knowledge sharing
The specified business goals that knowledge management seeks to achieve and,
A culture that understands the importance of a collective mindset within the organization.

Ruppel and Harrington (2001) also assert that the implementation of intranet knowledge management systems is facilitated through an organizational culture that promotes each of the following:

Trust and concern for other stakeholders
Flexibility and innovation
Policies, procedures and information management.

Top management seeking to implement these systems should therefore make sure that each of these procedures and cultures are present within the organization in order to obtain a successful adoption of its knowledge management initiative.

3. Analysis

a. Research Method

Based on the literature that has been reviewed and also on the purpose of this conference paper, the author adopted a positivist philosophy in ascertaining the success rate of “Learning Exchange” at Thomson Reuters. A deductive approach was also used when comparing data gathered to existing literature review.

Data was gathered through a case study analysis of an article written by Logan (2009) on the effectiveness of the learning exchange platform at Thomson Reuters. The author therefore aims to analyse the case study against the literature that has been reviewed on the topic with the hope of ascertaining the main factors that promoted or disrupted the intranet implementation processes at Thomson Reuters.

b. Analysis and Discussion

Being a knowledge based organization, Thomson Reuters faces the same challenges as outlined by Drucker (2001) – the possession and utilization of knowledge resources. A vast majority of its work force is composed of journalists and technical experts whose major competence is based, to a large extent, on what they know. Judging by Argote and Ingram’s (2000) theory, if journalists across several departments in the organization are unable to coalesce, then individual competences and knowledge would be useless.

This realization led the implementation of the “Learning Exchange” intranet platform, which aimed to create a unified formal platform for the sharing organizational knowledge. However, as Chin (2005) affirms, any knowledge-based intranet is only a backbone, which would only be successful if there is a unified adoption strategy within the organization.

According to reports garnered through a friend of mine, working at Thomson Reuters, the adoption of Learning Exchange has not been successful in meeting its implementation objectives. A vast majority of staff were sceptical about the process, especially due to the recent merger between Thomson Financials and Reuters that had occurred in 2008. The newly combined staff felt like it was a means for management to siphon out relevant knowledge from existing staff before they were let go. Thus confirming Ruppel and Harrington’s (2001) assertion that mutual trust amongst stakeholders was a very huge prerequisite for knowledge sharing.

The failure encountered with regards to the intranet adoption was also as a result of the predominant culture within the organization. Knowledge based organizations, as depicted by Drucker (2001), are known to be very competitive environments. Therefore employees hoard what they know, for the fear of losing importance, superiority or knowledge ownership (Zhuge, 2002). Some knowledge workers who had most of the relevant information were also hoarding a lot of relevant information. An employee within the organization said “it is just like a sales environment where you do not want to tell your colleague what you know, for the fear that they may do better than you”. This finding conforms to Hislop’s (2003) theory regarding the environment within which employees are encouraged to share information with one another. It also affirms Lin’s (2006) argument regarding the threat employees’ associate with knowledge sharing.

Ipe’s (2003) argument regarding the conditions within which employees share information also has a huge significance with relation to Learning Exchange. The ‘nature of the knowledge’ being shared is very valuable; therefore employees do not necessarily have that much ‘motivation to share’. Though the ‘opportunities to share’ are increasingly becoming available through the Learning Exchange, the ‘culture of the work environment’ does not necessarily permit it.

Learning Exchange is therefore increasingly becoming a backbone for knowledge sharing which has no “front-bone”. The more the knowledge hoarding culture within the organization is continuously being encouraged; the harder it becomes for knowledge workers within the organization to share information.

4. Conclusions

Though the initial aim of Thomson Reuters was the encourage organization wide knowledge sharing through the implementation of Learning Exchange, it did not possess the relevant organizational culture or employee willingness that the literature review had suggested. The platform for sharing was present, but its adoption and main objectives have not yet been met. The inability to successfully implement a knowledge sharing culture may lead to an increase in the risk of repetitive and overlapping processes within the organization, and also a lack of competitive advantage.

5. Recommendations

Based on the literature review, discussion and conclusions derived, these are my recommendations with regards to the implementation of Learning Exchange at Thomson Reuters.

Promote an organization – wide campaign that aims to change or at least minimize the predominant culture within the organization, in a bid to eradicate the knowledge hoarding actions that normally take place, and promote a more team approach.
Engage every user in the knowledge sharing intranet network by holding regular seminars and workshops on the importance of knowledge sharing. If possible, hold individual training sessions that educate all users on the benefits of sharing knowledge using the system.
Post an increasing number of organization information on Learning Exchange, as opposed to emails or bulletins. Incorporate predominant communication channels such as email and chat with Learning Exchange, in such a way that employees in the organization would have no choice but to adopt it for every day activities, and in the process learn more about its knowledge sharing features; then opt to use it.

6. References

Alavi, M. and Leidner, D. E. (2001) Knowledge management and knowledge management systems: Conceptual foundations and research issues, MIS Quarterly Vol. 25 (1) pp. 107–136.

Argote, L. and Ingram, P. (2000) Knowledge transfer: A basis for competitive advantages in firms, Organizational Behavior & Human Decision Processes 82 (1), pp150–169

Bartol, K.m. and Srivastava, A. (2002) Encouraging knowledge sharing: The role of organisational reward systems, Journal of Leadership & Organisational Studies 9 (1) (2002), pp. 64–76.

Bock, G. W., and Kim, Y. G. (2002) Breaking the myths of rewards, Information Resources Management Journal, Vol. 15 (2) (2002), pp. 14–21

Bresman, H., Birkinshaw, J., and Nobel, R. (1999) Knowledge transfer in International Acquisitions, Journal of International Business Studies, Vol. 30 (3), p439 – 462

Carlson, J. R., and Davis, G. B. (1998) An investigation of media selection among directors and managers: From “self” to “other” orientation, MIS Quarterly 22 (3),pp 335–362

Chin, P. (2005) Knowledge Sharing: The Facts and the Myths, Intranet Journal, www.intranetjournal.com

Davenport, T., De Long, D., and Beers, M. (1998) Successful knowledge management projects, Sloan Management Review, Vol. 39 (2) (1998), pp. 43–57.

Dawson, R. (2001) Knowledge capabilities as the focus of organisational development and strategy, Journal of Knowledge Management, Vol. 4 (4) (2001), pp320–327.

De Long, D. and Fahey, L. (2003) Diagnosing Cultural Barriers to Knowledge Management, Academy of Management Executive Vol. 14 (4), pp.113-127.

De Vries, R. E., van den Hoof, B., and de Ridder, J. A. (2006) Explaining Knowledge Sharing – The role of Team Communication Styles, Job Satisfaction, and Performance Beliefs, Communication Research, Vol. 33 (2), pp115-135

Drucker, P. (2001) The next society: A survey of the near future, The Economist Vol. 3 (November), pp. 2–20.

Goh, A. S. (2007) Integrating Knowledge Sharing Implementation: Toward An Institutionalized Symbiotic Model. International Journal of Applied Knowledge Management, Vol. 1 (1), p16-21

Hahn, J. and Wand, T. (2009) Knowledge management systems and organizational knowledge processing challenges: A field experiment, Decision Support Systems, Vol. 47 (4), pp332-342.

Hislop, D. (2003) Linking human resource management and knowledge management via commitment: A review and research agenda, Employee Relations 25 (2), pp. 182–202.

Huysman, M. and Wulf, V. (2006) IT to support knowledge sharing in communities, towards a social capital analysis, Journal of Information Technology 21, pp40–51

Ipe, M. (2003) Knowledge Sharing in Organizations: A conceptual Framework, Human Resource Development Review, Vol. 2(4), pp337-359

Lai. C, and Liu, D. (2009) Integrating knowledge flow mining and collaborative filtering to support document recommendation. Journal of Systems & Software, Vol. 82(12), pp2023-2037

Logan, G. (2009) Thomson Reuters adopt online knowledge sharing tool, Personnel Today, www.personneltoday.com, (accessed: 12/12/09)

Meng Hsun, S., Hsien Tang, T., Chi-Cheng, W., and Chung-Han, L. (2005) A holistic knowledge sharing framework in high-tech firms: game and co-opetition perspectives. International Journal of Technology Management, Vol. 36 (4), pp354-367.

Nissen, M. E., and Levitt, R. E. (2002) Dynamics Models of Knowledge-Flow Dynamics, CIFE Working Paper #76

Reychav. I, and Weisberg, J. (2009) Going beyond technology: Knowledge sharing as a tool for enhancing customer-oriented attitudes, International Journal of Information Management, Vol. 29 (5), pp353-361

Ruppel, C. P., and Harrington, S. J. (2001) Sharing Knowledge through intranets: A study of organizational culture and intranet implementation, IEEE transactions on professional communication, Vol. 44 (1), p37-52

Thomson Reuters (2009) ABOUT US, www.thomsonreuters.com/about, (accessed 10/10/2009)

Zhuge, H. (2002) A knowledge flow model for peer-to-peer team knowledge sharing and management, Expert Systems with Applications, Vol. 23 (1) (2002), pp23–30

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Free Essays

Free Technology Essay: Knowledge Management

Why do some knowledge-based organizations perform well in terms of innovation but less well in terms of efficiencyTo what extent can information systems help to redress this balance?


ABSTRACT

In this paper, focus will be given on analysing how an innovative organisation can be in-efficient. The key role of information systems in addressing this issue will be discussed. The perspectives of various researchers will be taken into consideration. The different type of knowledge management will also be discussed. The drawbacks of Knowledge Management without proper information systems will be highlighted.

Keywords: Knowledge Management, information systems, knowledge management disadvantages, knowledge management innovation


INTRODUCTION

It has regularly been said that the knowledge based organisations are not as efficient as they are innovative. The report by the top consultancy firm, KPMG also confirms this statement. A knowledge manager of KPMG, Nagle (1999) says that one of the major challenges being faced by the firms in today’s world is how to best capture, store, retain and share the vast amount of knowledge possesses by their professionals. As per Cameron (2000), “Knowledge is power, but without the adequate management of that knowledge, the consequences for [organizations] could be devastating”. It should not come as a surprise to us that most of the firms are of the view that the key enabler for efficient knowledge management will be technology. Currently the corporate efforts are concentrated more on the group of technologies called as Knowledge Management Systems (KMS).

KMS in firms assists its employees to easily access the information in a better way, share ideas and learn from previous mistakes. In theory, by facilitating the sharing of ideas, KMS improves the innovativeness of the business. However, the downside of this is that by following this process, firms become less efficient. In this process, employees tend to spend more time in doing things, discussing different ideas which results in issues in streamlining the work and doing it in an efficient manner.

The central question of discussion here is how information systems like SAP or ERM can help in enhancing the efficiency of KMS. How can the implementations of a new information system can help in reduction of time wastage and simultaneously assist in making the knowledge transfer process more efficient.

In this paper, first an introduction to the knowledge processes will be given. Then how the role of knowledge management evolved in organisations will be discussed. The merits of knowledge management will be highlighted. Furthermore the potential inefficiencies due to knowledge management will be discussed. Afterwards the role of information systems in curbing the drawbacks of knowledge management will be discussed in detail taking the example of few organisations who successfully implemented information systems in their organisations.

KNOWLEDGE MANAGEMENT

“Knowledge Management is concerned with the exploitation and development of the knowledge assets of an organisation with a view to furthering the organization’s objectives. The knowledge to be managed includes both explicit, documented knowledge and tacit, subjective knowledge. Management entails all those processes involved with identification, sharing and creation of knowledge.” (Davenport et al, 1998).

Figure 1: Knowledge hierarchy

Figure 1 gives a good idea of the hierarchy of knowledge. It shows how value can be added from the raw data which are at the disposal of organisations. By following the hierarchy, it can be seen how the data become information when applied to a particular context. This perspective will be discussed in detail later on. Furthermore, that information becomes knowledge when a particular meaning is applied to it. Finally that knowledge becomes wisdom when it is used as an insight. This wisdom is then useful for any organisation.

Knowledge can mainly be classified into two types: tacit and explicit knowledge. It has always been difficult to define these two types of knowledge. Tacit knowledge is basically rooted in a specific context, is subjective, highly experimental and largely unconscious. While explicit knowledge is mainly rule based, reusable and is objective.

Figure 2: Tacit and Explicit Knowledge

Figure 2 displays the difference between explicit and implicit knowledge when applied in the context of adding value to an organisation. It highlights the fact that the main difference between the two is use of communication in tacit knowledge. While in the case of explicit knowledge models are being used to add value.

Figure 3: Types of Knowledge (Willcocks and Whitley, 2009)

Knowledge can further be classified into individual level and collective level. Figure 3 shows the interaction between the types of knowledge in a matrix form. This figure further highlights the difference between the explicit and tacit knowledge.

In the case of knowledge based organisation, KM can mainly be classified into two varieties. First is, IT-focussed where knowledge is an object. IT is used to increase productivity of an organisation. Firms attempt to leverage the already held data. The firm wide relationship is enabled electronically. Second variety is Human- centred where knowledge is a process which leads to creation of more knowledge. It is primarily focussed on sharing knowledge and learning and innovation.

Figure 4: Interaction of Knowing and Types of Knowledge

Source: Small and Sage, 2005/2006

Figure 4 shows how knowledge is applied in the context of an organisation. In this interaction, the process of ‘knowing’ remains at the core of the matrix and is used as an ‘action’.

Different academics are of different views about knowledge based organisations. Pentland (1995) says that knowledge is mostly constructed socially and is shared between the participants in an organisational culture even though the participants have their own individual perspectives and views of the organisational situations. Sahay and Robey (1996) further capture on this concept in their proposal of knowledge operationalization as “social interpretation” (Schultze and Leidner, 2002).

The different perspectives of knowledge in an organisational context are: knowledge vis-a-vis data and information, state of mind, object, process, access to information and capacity. To further elaborate on the same it can be said that data is facts, raw numbers. Knowledge is customized information. In this case, KM concentrates on passing potentially useful information to individuals, thereby enabling incorporation of information. Next is the perspective of “state of mind” where knowledge behaves as the expression of knowing and interpreting. Here KM includes improving employees learning and understanding by providing information. Another perspective is that knowledge is perceived as a body to be stored and modified. Fourth is the view of knowledge being perceived as the expertise application process. The central focus of KM is over the process of creation, sharing, distribution and flow of knowledge. Fifth perspective is the knowledge being viewed as a requirement to retrieve information. The KM focuses of on methodological access to and retrieval of information. Finally knowledge is perceived as the potential to influence action.

KNOWLEDGE BASED ORGANISATIONS

In this section, it will be analysed as to how knowledge based organisations innovate better than the ones who are not knowledge based. Automotive industry provides a very good opportunity to examine inter-organizational learning. More than 70 per cent of the value of vehicle is developed and manufactured by OEMs and their supplier networks. As a consequence of this, the productivity of the network of firms working in collaboration is directly related to the quality and cost of the automobile. Most of the research in automotive sector shows that Japanese automotive network, in particular, Toyota has been far superior in transferring the productivity improving knowledge throughout the supply network (Dyer and Nobeoka, 2000).

Figure 5: Comparison between Automotive Labor Productivity of US and Japanese Carmakers

The ‘network’ of Toyota seems very effective in facilitating inter-organisational knowledge transfers (Dyer and Nobeoka, 2000). It will not be wrong to call it a model for the future of automotive industry.

One of the major dilemmas which Toyota faced while implementing the knowledge management processes in their organisation is to how to do the knowledge transfers among a large number of individual members in the most efficient manner. There were appropriate conditions to take care of other dilemmas like keeping the individuals motivated enough to participate actively and curbing free riding. But the critical steps necessary for proper flow of knowledge among members was not efficient enough. While explicit knowledge can easily be codified and transmitted to a large group of individuals via meetings and other activities, transfer of tacit knowledge required strong collaboration and can probably be transferred merely to a small cluster of individuals at a particular location only(Dyer and Nobeoka, 2000). Sharing information through meetings will result in inefficiency in transfer of tacit knowledge.

To counter this issue, Toyota promoted the thinking of kyoson kyoei and created a collective network-level knowledge transmission, repository and processes of diffusion. Four of the key network-level processes were: “(1) the supplier association (a network-level forum for creating a shared social community, inculcating network norms, and sharing knowledge), (2) Toyota’s operations management consulting division (a network-level unit given accountability for knowledge acquisition, storage, and diffusion within the network), (3) voluntary small group learning teams (jishuken), or a sub-network forum for knowledge sharing that creates strong ties and a shared community among small groups of suppliers, and (4) inter-firm employee transfers (some job rotations occur at the network level)” (Dyer and Nobeoka, 2000). These four critical processes managed to create an ‘identity’ of the network. Moreover it also facilitated knowledge transfer among network member.

Figure 6: Toyota’s network-level knowledge-sharing processes

Figure 6 gives a fuller picture of the knowledge sharing processes implemented in Toyota. By following these processes, Toyota managed to build robust mutual relationship with suppliers. Furthermore suppliers also started getting critical knowledge at nominal cost. As of result of this, suppliers participated in the network with a keen interest. It was not only to show their commitment towards Toyota but also to get knowledge transfers from Toyota. The more valuable tacit knowledge was being transferred in the bilateral atmosphere. This resulted in giving a powerful identity to the network. Suppliers began to correlate with the social community of the network.

All this was made possible by the learning groups which resulted in strong multi-dimensional relationships. Moreover suppliers also recognised the merits of sharing of knowledge. Additionally the Toyota suppliers were also in competition among themselves in the sense that the quickest grasping supplier will most probably get business for the new model.

It has been a major accomplishment for Toyota in the way they managed to “motivate all the members to participate and contribute knowledge” (Burgess, 2005) for the collective good.

Organisations who are leaders in knowledge management have used extrinsic rewards (Davenport & Prusak, 1998). To further substantiate this statement, experienced consultants at Ernst & Young and McKinsey were evaluated, on the basis of knowledge they contribute to their organisation. These consultants are of the view that “one party has to be willing to give something or get something from another party”. They were of the view that open and organic information culture leads to larger sharing. Furthermore they also proposed that those individuals who feel that their knowledge belongs to them rather than to their organisation can be expected to share their knowledge more (Burgess, 2005).

Disadvantages of KM

Research has shown that the ready availability of examples for KMS users led to a significant enhancement in their problem-solving skills when compared to the skills level gained through the use of traditional reference materials (McCall et al, 2008). Results have further shown that groups having access to KMS far outperforms those working in the traditional groups. Moreover this edge vanishes when the KMS access is removed. It has also been deducted that while both the groups gain different types of explicit knowledge the traditional groups have a tendency to encode most of the rules in memory. However the KMS group manages to gain superior-level of explicit knowledge which acts as a key to tacit knowledge formulation.

In the context of business, researchers have found that employees are more willing to exchange knowledge if it is related to business goals (Small and Sage, 2005/2006). They have put more emphasis on the importance of business strategy to be communicated to the employees. Another important aspect to be noted here is that the knowledge sometimes acts as a double-edged sword; though too less leads to in-efficiencies, too much can lead to rigidities that can be counterproductive in a rapidly changing world. Furthermore too little may lead to muddled social relations, too much will lead to curbing of different perspectives (Bowker and Star, 1999). According to Schultze and Leidner (2002), too little may lead to costly errors, too much may lead to undesirable answerability. IT can play a major role in all the knowledge management processes like knowledge creation, storage/retrieval, transfer and application.

One of the most critical issues being faced by the organisations in today’s world is their deficiency of skill to capture and incorporate information located in different sources. While some of these are internal to an organisation (data warehouse, transaction database, knowledge portals) others are external (commercial database, credit reports, news agency announcements, etc.) (Delen and Hawamdeh, 2009). If the organisations try to integrate the multiple sources into a single unified system just for the sake of centralization of the sources of information then it leads to highly rigid systems which are not practically manageable.

Some of the major reasons of the failure of KM are the multifaceted and multidimensional nature of knowledge available in an organisation. The dynamic nature and relationships between the knowledge management frameworks is also cited as one of the major reasons of failure of KMS.

Role of Information Systems

An efficient KMS should allow the user to easily access the explicit knowledge stored in any system that can be applied to address the issue in hand. KMS should increase the ease with which user can find a potential solution to the problematic situation. KMS makes the user relax about the need to encode the explicit knowledge in long-term memory as the knowledge components can easily be accesses by the user’s active working memory (McCall et al, 2008).

There are two critical demerits of KMS which might balance out the potential of the encoding of the knowledge available explicitly. Firstly, the vast amount of information and different ways of retrieving it via KMS could lead to likely increase in the amount of mental workout to retrieve the information (Rose and Wolfe, 2000; Rose, 2005). Secondly, it is the supposed simplicity of availability. If the information is easily accessible then the user will just use it for his situation without feeling any kind of motivation to encode the knowledge.

Researchers have found that many companies who have implemented Enterprise Resource Planning (ERP) are of the view that the software will provide them a new chance to improve operational support and will simultaneously provide them a competitive advantage also (Irani et al, 2007). However the concept of ‘justification’ happens only at those places where every employee is made aware of the importance of the new software for the organisational sustainability. Although the resources of knowledge varies firm wide but usually it constitutes of manuals, letters, information about customers and derived knowledge of work processes. Organisations are realising that knowledge will not automatically flow throughout the company.

A critical aspect of knowledge sharing is providing the right means which should work within the organisational context. Over the period of time, organisations have realised that information technology (IT) is the only means by which enterprise knowledge can be shared effectively. Video-conferencing, sharing of application and providing support electronically are some of the key enablers of knowledge sharing processes. They can provide an excellent support to the already existing infrastructure of knowledge management.

Few of the major benefits of Knowledge Management systems are (1) In-valuable information can be shared throughout the hierarchy of the organisation. (2) Provides the opportunity to do away with churning out the same work thereby resulting in reduction of out-dated work. (3) New employees can be trained in a shorter period. (4) The intellectual property is retained by the organisation even of the employees’ leaves if it is possible to codify that knowledge. Some of the organisations who implemented the KMS very effectively and efficiently are MIT Open Course Ware, Knowledge Wharton. Although both of these organisations are educational institutions they provide an excellent case study of efficiently using information systems in their KM processes.

The key role being played by information systems is to assist in the storage and diffusion of knowledge so that knowledge can be accessed across the space and time (Schultze and Leidner, 2002). Information systems provide visibility to the invisible work and the complexity involved in doing that work.

Figure 7: KMS Success Model (Halawi et al, 2007-2008)

Figure 7 shows the key role being played by information systems in the success of KM projects. Normally it is at the centre of many KM projects (Halawi et al, 2007-2008).

However organisations who are implementing information systems into their KMS need to take few factors into consideration. The so-called ‘free’ exchange of knowledge is possible only in an ‘open’ corporate culture, non-departmental hierarchy. Furthermore sometimes this ‘open’ culture can act as an obstacle for employee empowerment (Irani et al, 2007).

Another point to be noted about multi-faceted aspect of KMS is that an effective KMS in not just about technology. It incorporates cultural and organisational aspects as well, it is necessary to design proper metrics to access the positives of KMS (Halawi et al, 2007-2008). Furthermore an integrated technical architecture is the critical driver for KMS. Proper use of information systems will facilitate the process of knowledge transfer, assisting in both the transmission and absorption and utilisation of knowledge. Researchers have found groupware, an IT tool for working in a group is of immense help in the proper implementation of KM in organisations. Groupware helps in interpersonal communications and facilitates the transfer of tacit knowledge (Wua et al, 2010). Researchers have found that the software tools and information systems applications are very crucial for both the ‘provider’ side and ‘receiver’ side.

Most of the top technology firms rely mainly on their dynamic ability to transform the knowledge in their organisation to add value to their customers. Researchers are of the view that the focus on tacit knowledge should not lead to not giving due importance to proper implementation of information systems. A proper balance needs to be found and exercised (Kalkan, 2008). In the current world, any organisation having improper implementation of information systems will be at a disadvantage position in the marketplace. Implementation of information systems should always be knowledge oriented.

CONCLUSION

This paper makes an attempt to analyse the role of information systems in efficient utilisation of KM. It has been highlighted as to how information systems are crucial in making an innovative organisation highly efficient. The demerits of KM without proper information systems are discussed. The efficient way in which Toyota managed its knowledge sharing using information systems within the organisation and across its suppliers has been discussed in detail. An attempt has been made to throw more light on the other aspects of proper IS implementation. Organisations should not consider that just by implementing Information systems all our problems will be solved. Information Systems should not be considered as a ‘silver bullet’.

As the research area is still evolving, more future research can be done on this topic. There are further sub-categories within KM which can be researched in more detail. Those categories will further provide a detailed view of the topic. While few organisations who implemented information systems has been analysed, other organisations also need to be analysed in this regard. Furthermore the definition of innovation and efficiency can be analysed from the perspectives of organisations implementing. This will provide a broader picture of the research area.


REFERENCES

Burgess, D. (2005). WHAT MOTIVATES EMPLOYEES TO TRANSFER KNOWLEDGE OUTSIDE THEIR WORK UNITJournal of Business Communication, 42(4), 324-348.

Cameron, P. . (2000). Managing the wealth. CMA Management, 74(9), 46–49.

Davenport, T. H. (1998). Working Knowledge: How Organizations Manage What They Know. Harvard Business School Press.

Davenport, T. H., De Long, D. W., & & Beers, M. C. (1998). Successful Knowledge Management Projects. Sloan Management Review, 39(2), 43-57.

DELEN, D. AND HAWAMDEH, S. (2009). A Holistic Framework for Knowledge Discovery and Management. COMMUNICATIONS OF THE ACM, 52(6), 141-145.

DYER, J. H.and NOBEOKA, K. (2000). CREATING AND MANAGING A HIGH PERFORMANCE KNOWLEDGE-SHARING NETWORK: THE TOYOTA CASE. Strategic Management Journal, 21, 345–367.

IRANI, Z., SHARIF, A. M. and LOVE, P. E. D. (2007). Knowledge mapping for information systems evaluation in manufacturing. International Journal of Production Research, 45(11), 2435–2457.

Kalkan, V. D. (2008). An overall view of knowledge management challenges for global business. Business Process Management Journal, 14(3), 390-400.

McCall, H., & Arnold, V. a. (2008). Use of Knowledge Management Systems and the Impact on the Acquisition of Explicit Knowledge. JOURNAL OF INFORMATION SYSTEMS, 22(2), 77–101.

Nagle, C. (1999). Research opportunities in knowledge management. Auditing Section of the American Accounting Association.

Pentland . (1995). Information Systems and Organizational Learning: The Social Epistemology of Organizational Knowledge. AMIT.

Rose, J. M. and Wolfe, C. J. (2000). The effects of system design alternatives on the acquisition of tax knowledge from a computerized tax decision aid. Accounting, Organizations and Society, 25, 285–306.

Rose. J. M. (2005). Decision aids and experiential learning. Behavioral Research in Accounting, 17, 175–189.

Schultze, U., & Leidner, D. E. (2002). STUDYING KNOWLEDGE MANAGEMENT IN INFORMATION SYSTEMS RESEARCH: DISCOURSES AND THEORETICAL ASSUMPTIONS. MIS Quarterly, 26(3), 213-242.

Small, C. T., and Sage, A. P. (2005/2006). Knowledge management and knowledge sharing: A review. Information Knowledge Systems Management, 153–169.

Willcocks, L. and Whitley, E. A. (2009). Developing the Information and Knowledge Agenda in Information Systems: Insights From Philosophy. The Information Society, 190–197.

Wua, C. H.; Kao, S. C. and Shih, L. H. (2010). Assessing the suitability of process and information technology in supporting tacit knowledge transfer. Behaviour & Information Technology, 29(5), 513–525.

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Business & Management Dissertation Topics (2018)

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Business & Dissertation Topics
1.0. Introduction

Business & Dissertation Topics ~ Hundreds of Topics absolutely FREE

The aim of this guide is to assist in selecting business & management dissertation topics and to provide practical advice on how to go about writing a dissertation.

Business dissertations incorporate numerous topics covering various aspects of business studies. Typically, writing a business dissertation involves questions such as how to report the features of the design and how to adequately report research results.

Consequently, the latter part of the guide serves as a handy reference source to navigate the writer through the process.

2.0. Categories and subsequent list of dissertation titles

2.1. Business, Government and society

2.1.1. Measuring and evaluating whether or not there is a causal relationship between corporate social responsibility and corporate financial performance

2.1.2. Is reputation-building the paramount reason why business leaders integrate CSR into their overall business strategiesThe case of Nike

2.1.3. Assessing the effects of evolving consumer expectations of corporate philanthropy on the shareholder and stakeholder primacy models of CSR

2.1.4. An assessment of the implications of societal perceptions of corporate influence in determining governmental decision-making processes. The case of Shell in the Niger Delta

2.1.5. Can Governments effectively prevent the formulation of monopolies and curb unfair practices of large corporations. The case of Microsoft

2.1.6. An assessment of Obama’s health care reforms: Are intentions to drive down healthcare costs for corporations and government, whilst protecting the profits of insurance companies a viable strategy?

2.1.7. In practice does the public good transcend the rights of individuals and firms to seek profit without regard to societal consequences?

2.1.8. Is CSR is too vague and indeterminate for the corporation to truly fulfil the criteria it demands and make an effectual contribution to the community of its operations?

2.1.9. Creating shared value: How can corporate policies and practices enhance company competitiveness and simultaneously advance community social and economic conditions?

2.1.10. Does government maintenance of a high level of integrity and transparency correlate with creating an auspicious environment for private sector growth and investmentThe case of Tanzania

2.2. Organisational leadership

2.2.1. Do organisations need to concentrate on distinguishing leadership from management in order to achieve effective overall corporate strategies?

2.2.2. An evaluation of the Latern model as an integrated, systematic approach to organisational and successful leadership development

2.2.3. Does organisational leadership provide the functions of leadership to an organisationally beneficial degree than that of individual charismatic leadership on its own?

2.2.4. How does the micro and macro perspective of leadership provide insight into effective leadership characteristics required to sustain competitiveness on a continuous basis?

2.2.5. Is the development of a common language for team leadership and leadership amongst directors and managers the answer for enhanced teamwork on an organisational-wide basis?

2.2.6. An examination of the impact of organisational culture on leadership decision for organisational reinvention: The case of Nokia

2.2.7. An examination of a leadership paradigm proposing the coexistence of multiple leaders: Abandoning the traditional leader/follow concept for organisational leadership distribution to form communities of leaders along the chain of command

2.2.8. In difficult economic times how can leadership redefine organisational processes and leverage institutional and outside knowledge more effectively?

2.2.9. Can the success of 3M be attributed to a leadership philosophy to create an organisation equipped with the capabilities to continuously innovate, learn and renew?

2.2.10. The changing nature of leadership: Why humility and courage are two frequently cited words in relation to leadership in the 21st century?

2.3. Organisational behaviour

2.3.1. Goal setting: Are people more likely to perform relative to a goal if it is consistent with personal values and standards or will bring recognition or improved reputation?

2.3.2. An investigation into managerial measurement indicators for employee job satisfaction and the ability of the organisation to meet employee needs

2.3.3. What are the advantages and disadvantages of management tendency to attract and recruit people based on characteristics similar to established organisational patterns of behaviour or culture?

2.3.4. The correlation between organisational culture and firm performance: Does firm focus on building strong organisational culture outperform comparative firms lacking these characteristics?

2.3.5. An examination of ethical behaviour, the counter-norms and accepted practices developed by organisations: The reasons why individuals knowingly commit unethical actions

2.3.6. What is the relationship between the national culture and the commitment to organisational cultureThe case of Brazil

2.3.7. Examining the correlation between organisational culture, innovation, creativity and the likelihood of the successful implementation of ideas?

2.3.8. Is managerial behaviour imperative in the development of trust and belongingness for the facilitation of information sharing in the organisation?

2.3.9. An examination of employee perception of women’s adoption of stereotypically male leadership styles in traditionally male dominated organisational positions in the 21st century

2.3.10. Organisational agility: Is technological innovation the solution for survival in turbulent timesA study of mobile telecommunications

2.4. Global business environment

2.4.1. How do ethnic dimensions of employee behaviour impact on the profitability of the corporation in the international environment?

2.4.2. Examining the challenges of protecting electronic personally identifiable information in the global business environment. Achieving data protection harmony

2.4.3. Is Starbuck’s planned entry into India an example of organisational exhaustion of developed markets?

2.4.4. An assessment of approaches adopted by the tourist industry to screen the business environment for climate change and the actions taken to mitigate climate impact

2.4.5. Should corporations place greater emphasis on corporate diplomacy and increase negotiation skills investment for executives operating in the current volatile business environment?

2.4.6. An examination of the significance of corporate value chain structure and core business activity on management decision to adopt an International framework Agreement?

2.4.7. An assessment of FDI flows in difficult economic times: Why have FDI flows to developing and transitional economies remained more resilient than to developed economies?

2.4.8. Does geographical proximity of the host to the domestic country of investors reduce informational and managerial uncertainty?

2.4.9. An examination of the methods employed by countries to enhance international competitiveness for FDI: A case study of Sub-Saharan Africa

2.4.10. How does the characteristic of the organisation’s host country providing FDI impact the probability of the recipient country benefiting or losing from FDI opportunities?

2.5. Strategic management

2.5.1. An assessment of regional strategic management in the fast food restaurant industry: The global operations of McDonalds in the US, Europe, Asia-Pacific, Middle East and Africa

2.5.2. An examination of the origin and nature of the management strategy influencing people to regularly communicate through networking sites. A case study of Facebook

2.5.3. Does the strategic difference between Amazon.com and eBay amount to the handling of physical goods with accepted ownership and “virtual” products without accepted ownership?

2.5.4. Is adaptive thinking the starting point of effective management strategy formulation for harmonious co-alignment between the corporation and the operating environment?

2.5.5. Are “resource-based” strategies dependent on the governance structure within which a firm can leverage its resources?

2.5.6. Is the ability to take a holistic perspective of the organisation and its environment the primary ingredient of strategic thinking and formulation?

2.5.7. Analysing hyper-competitiveness in contemporary business environments: Does hyper-competitiveness render determining systematic strategic direction for enterprises impossible?

2.5.8. Assessing considerations of stakeholder objectives in the strategic business process and how this varies between different cultures

2.5.9. Can planned, opportunistic or forced decisions really be considered as strategyA case study of the Chrysler and Daimler Benz merger

2.5.10. Can firm strategy be adapted to contextual external environment while simultaneously remaining internally consistentThe case of Sony

2.6. International Business strategy

2.6.1. An investigation into how push and pull factors combined to motivate Tesco to adapt an internationalisation strategy

2.6.2. Globalisation, e-strategies and performance: How can organisations develop a successful social media strategy in the international business environment?

2.6.3. Examining entry strategies of foreign companies in the Indian Android smartphone market. The case of Samsung Android phones

2.6.4. Determinants of multinational corporations’ choice of entry modes and formation of alliances: The Sri Lankan experience

2.6.5. How can banks enhance international connectivity with business customers: A study of HSBC?

2.6.6. An investigation of multinational corporations’ determinants of FDI in transitional economies. A case study of the Czech Republic

2.6.7. An exploration of the relationship between internationalisation and SME performance: The export behaviour and performance of SMEs in the German context

2.6.8. Implementing a cross-border management strategy: A study of foreign companies in the Malaysian telecommunication industry

2.6.9. How does offshore outsourcing of customer services affect customer satisfactionThe case of AOL customer services outsource to India

2.6.10. Identifying the drivers of Chinese business leader’s strategy for expansion into Africa. The resource-seeking and market-seeking perspective

2.7. Project management

2.7.1. An examination of project management effectiveness in project-oriented business organisations. The significance of leadership organisational structure and technical capacity

2.7.2. Is planning, organising, networking and informing the most significant managerial practices in the leadership behaviour of project managers?

2.7.3. An analysis of critical success factors in project management: Are client presentation methods of needs and expectations determinant of project success/failure?

2.7.4. A study of the capabilities required by project managers to effectively manage stakeholder relationships?

2.7.5. Project management in a multicultural environment: Establishing guides for culturally specific consulting

2.7.6. A project management perspective on capabilities to deliver M&A projects on budget, to timescale and on expected synergies

2.7.7. Change management, project management and intervention: A study of Banco Santander internationalisation banking ventures

2.7.8. An assessment of the lifecycle management framework adopted by BAE Systems as a core business process approach for project management

2.7.9. Does outsourcing project management office functions improve organisationalA case study of the financial retail industry in India

2.7.10. An examination of the critical capabilities for outsourcing and offshoring information systems projects

2.8. Innovation and Entrepreneurship

2.8.1. An exploration of the synergies between entrepreneurship and innovation on organisational development in the E-commerce industry: A case study of Amazon.com

2.8.2. A study of firm resources, capabilities and internal firm conditions in strategic decisions to organise entrepreneurship for enhanced performance

2.8.3. An examination of social entrepreneurship and CSR as contributors to solving community problems. A case study of social enterprise development in South Africa

2.8.4. An explanation of organisational drivers of innovation and entrepreneurship: Exploring entrepreneurial innovation in the Chinese private sector

2.8.5. How does organisational approach to innovation and corporate entrepreneurship training interventions impact employee performance?

2.8.6. The impact of entrepreneurial characteristics on firm performance: Uncovering the characteristics of strategic entrepreneurship on the performance of Nigerian SMEs

2.8.7. The exploration and exploitation of knowledge management and intrapreneurship and the linkage with competitive dynamics. A case study of Sony PlayStation

2.8.8. An assessment of leadership role in fostering organisational cultural components for enhancing innovation in the Malaysian public sector

2.8.9. The innovation relationship between organisation operational capabilities and market outcome. A case study of Proctor and Gamble

2.8.10. An exploration of innovation and entrepreneurship in family and non-family SMEs in the UK

2.9. Enterprise risk management

2.9.1. Is the relationship between Enterprise risk management and firm performance contingent on adequacies of internal controlInternal control mechanisms and firm financial performance in Ghana

2.9.2. An analysis of deficiencies in internal controls and risk management systems in financial institutions. A study of Lehman Brother’s bankruptcy

2.9.3. Assessing the effects of culture on the enterprise risk management of business managers in the Mexican oil and gas industry

2.9.4. Addressing corporate governance and organisational risk management challenges in the Caribbean. A study of risk management structures in Jamaica

2.9.5. A comparative study of risk management and information security in non-financial SMEs operating in the US and UK

2.9.6. A consideration of risk management, configuration management and change management as an integrated framework for delivery of IT security in organisational operations

2.9.7. Examining enterprise-wide risk management practices and the implications of communicating the strategy across the organisation’s business or between departments

2.9.8. An investigation into stakeholder pressure on organisations to implement or refine enterprise risk management strategy. A study of Zurich Financial Services

2.9.9. Is protection against loss and damage to reputation the most important potential benefit of an ERM strategyA case study of the UK insurance industry

2.9.10. An analysis of risk management in senior management decisions. A case study of French banks

2.10. International human resource management

2.10.1. Multinational subsidiaries and the configuration of human resources management. The case of Spanish banks in Latin America

2.10.2. An assessment of the trends towards the coordination of management practices in multinational corporations: The contribution of multinational firms to the development of standardised international best practices in HRM

2.10.3. Evaluating the multinational corporation balancing act of developing standardised policies with the pressures to be responsive to the peculiarities of the local context. A case study of international banking

2.10.4. Examining the cultural effects of knowledge transfer in multinational subsidiaries. Is inter-subsidiary knowledge transfers likely to be most effective in subsidiaries located in similar cultural contexts?

2.10.5. Moderating the influence of cultural on relationships between strategic human resources management practices, motivation and organisational performance. A study of multinational corporations in Kenya

2.10.6. Is there a distinctive Chinese approach to human resources managementA study of international resources management in Chinese multinational enterprises

2.10.7. An investigation of the dynamics of trust on international human resources management practices in shaping organisational performance

2.10.8. Developing measurements of firm strategy to assist in the importance of international HRM alignment for the achievement of maximum firm performance

2.10.9. The impact of international human resources practices and organisational culture on managerial effectiveness in multinational corporations in India

2.10.10. Is centralisation, coordination and decentralisation the solution for achieving a successful interplay of IHRM strategy for centralised control and responsiveness to local circumstancesA case study of Siemens

3.0. How to structure a business dissertation

Title Page

Dedication

Acknowledgements

Abstract: A summary of the dissertation

Table of Contents

Introduction: Introduces the study and summaries the state of area prior to the research. This section outlines the problem(s) to be investigated, the aims and objectives of the research and describes the methodologies used. Additionally, an outline of the overall dissertation structure may be included.

Literature Review: This accounts the previously written, published and unpublished literature on the selected research topic. The purpose of conducting a review on the existing knowledge and ideas on the topic is to highlight the strengths and weaknesses of the research area whilst defining a guiding concept for the dissertation. To achieve this, four important steps must be followed: concentrate on the relevant theories; break down the topic and define key terms; examine recent research in the area; and conclude with the research questions that will be resolved in the study.

Methodology: This section is designed to give the reader a coherent, clear and precise account of how the study was conducted. The section is composed of number of sub-sections which should include: research philosophy, research approach, research strategy, data collection and any problems encountered in the data gathering process, data reliability, validity and generalizability, and finally, ethical issues and possible limitations with the research.

Results: An essential tip for this section is to only report the findings of the study in the most appropriate manner, resisting in the process the temptation to interpret or draw conclusions.

Discussion: The interpretation of the results is undertaken in this section. The first task is to state what the results of the study are by outlining the findings. Account for the findings by indicating whether or not the research hypothesis has been supported. The second task involves linking the results with the evidence discussed in the literature review. Finally, explore the implications of the findings with regards to the research questions together with consideration of the direction and form that future research should take.

Conclusion: This section provides a summary to the overall study and final comments and judgements. The final comment should entail making suggestions for improvement and speculations for future research.

References: Approval should be sought from University for appropriate layout

Appendices: This section contains graphs and diagrams used when writing the dissertation. The purpose of appendices is essentially to enable the expansion of information only included in abbreviated format in the body of the dissertation. Make sure that vital information is not mentioned here for the first time.

Also, make sure you review Free Dissertation Topics and let us know how our site can help you.

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Project Management Dissertation

Dissertation Topics on Project Management in the Constructions Industry
our site – CUSTOM ESSAY WRITING – DISSERTATION EXAMPLES

The following guide contains dissertation topics on project management in the construction industry. These were provided specifically for a client looking to work on the construction industry in Nigeria, but could be modified to suit any construction industry setting.

1. How can strategic project management be used to mitigate delays and overruns in expenditure in the construction industry: A Study of the Construction Industry in Nigeria

The construction industry in Nigeriais notorious for delays and excess expenditure.
Ideally, this topic would consider the plight of one company, however the majority of the literature considers delays in the industry as a whole.
Fairly evidently the topic requires the use of project management strategies in order to prevent these delays, or lessen the effect thereof.

2. Considering the epidemic of delays in Nigeria’s construction industry, explain how project management organizational culture will need to change in order to change the face the industry to avoid these delays in the future.

This topic will explore the current project management organizational culture and identify the current issues with this culture.
After analysis of the current climate, it will look to explore the development of this culture to mitigate the issues faced by Nigeria.
This may necessitate the need to ‘borrow’ PM organizational culture from another industry similar to construction in Nigeria, e.g. oil and gas exploration. Think of it as a comparative case study between industries.

3. What factors affect the outcome of construction projects in Nigeria: A Project Management perspective

This simply looks at the factors relating to PM that may potentially affect the outcome of a construction project.
This does not necessarily only focus on the causes of delays, but the general factors that affect the outcome, including the successes and the expedience of the project generally.
See Chan, A., Scott, D. & Chan, A. (2004) “Factors Affecting the Success of a Construction Project” Journal of Construction Engineering & Management, Vol 130(1), pp. 153 – 155

4. Consider the underlying theoretical considerations of Project Management and explain by way of example the implementation of these considerations in practice.

Basically, this question will take a case study of a construction or other company inNigeriaand use this company to demonstrate the application of theoretical issues in PM
This topic requires demonstration of theory in practice by way of case study.
See Soderlund, J. (2004) “Building theories of project management: past research, questions for the future” International Journal of Project Management, Vol 22, pp. 183 – 191

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Knowledge Management in Public Sector Organizations

Introduction

Knowledge itself is an abstract concept but its application can be seen in every walk of life. Knowledge and innovation go hand in hand and together they generate success for the development of any society. Knowledge accumulation creates value and it is this wealth which has transformed the agrarian societies into industrialized nations (Milner, 2000). Knowledge gives a competitive edge to companies as it is one of the most useful resources that they possess. However in this fast pace world one has to cope with the changing needs of the environment and utilize the knowledge in the most efficient manner in order to extract its full potential. Moreover the rapid pace of technology has facilitated this entire process and Internet has changed the landscape of business environments. Today’s economies are knowledge based economies (Emrich, 2005).

Peter Drucker said,

“The Purpose of management is the productivity of knowledge”

(Kelly, 2004)

There are various definitions of knowledge management, however to put it simple it is the management process within the organization that deals with the collection, organization and sharing of knowledge in the enterprise which is then integrated, evaluated and developed and distributed to all the other parts of the organization. Knowledge management has become an integral part of managerial activity as it helps to take right decisions at the right time with the real information in hand. This information is then provided to all the members of the organization (Gurrieri, 2008). In other words this knowledge is transferred to other products and services of the company which helps in value creation. This also helps in giving an enterprise a strategic edge over other firms. Knowledge management on the whole is not just confined to information technology only but it covers all the aspects such as the employees, the processes and the workflow, which means that knowledge management doesn’t have to be limited to information technology though there is no doubt that technology plays an integral role in the KM but our focus of this paper is going to be on the aspect of technology and knowledge management in the public sector firms particularly our focus is going to be on the education sector here (Hetland et al, 2007).

The distribution of tasks among the knowledge management dimensions

Source: (Milner, 2000)

Information technology and knowledge management in the Public Sector

The way we access the information has now changed due to which the relevance of knowledge management has increased over the period of time. Therefore all the firms including the public sector organizations through the aid of knowledge workers are investing more in technology in order to make use of newer applications to increase productivity, accountability and transparency in order to increase the level of efficiency and to improvise the entire process of public sector reforms. Government sector organizations are knowledge based due to which this area of study is of so much importance to them. They need its application at the local regional and national level (Milner, 2000).

When we talk about technology and management together, this means that data warehousing is an essential element of the KM. there are several software’s that are used to assimilate the information and distribute it among the various organs of the firm such as document management systems, e learning tools, objected oriented databases, artificial intelligence, real time access to a firms data base, enterprise information portals (ERP). These and several other IT programs tend to be effective tools for the management of the information without which work is not possible. The public sector organizations have also entered into this digital age of electronic means especially after the advent of policies like the ICT (Kelly, 2004).The public sector therefore fulfills its responsibility by recruiting the best people for the development of knowledge, growth and learning because it has to accomplish the following goals:

Knowledge development and provide information unlike the private sector

Promote knowledge for every one

Quality

Management efficiency

The structure of the government matters in this context because as the government has to take care of the intellectual rights

Knowledge Kiosks (Watts and Lloyd, 2004)

The analytical knowledge management framework

(Steyn and Kahn, 2008)

The above diagram shows various elements of the knowledge management. It is an integration of people, processes, technology which together create value.

In the government sector knowledge gets dispersed because governments are segmented by state and local level. Other than that as per the government policy the government keeps on changing due to which the current government gets to learn from the previous one, this gives an opportunity to the government to every time learn from its experiences and improve its system through good governance (Slabbert, 2004). Knowledge management in the government sector paves the way for incorporating the electronic means into the government sector. The ICT infrastructure helps the government to achieve its goals and to educate the citizens of the country to have access to quality information which they can utilize and also they themselves can bring value to the nation through knowledge sharing (Beal and Thomas, 2004).

The public sector organizations depends more on people based approach but to do so they have to come up with an appropriate framework for knowledge management. Moreover it has been seen that the level of accountability is stricter in the public sector organizations as compared to the private sector but studies have shown that the public sector organizations have been slow in terms of adaptability relative to private sector (Alleman, 1992). This is owing to the lack of awareness, rigid policies, people are not willing to share because they don’t see much incentive in doing so and also people on the public sector are less resistant to change. The entire set up is based on bureaucracy and the goal is not profit maximization. People working in the domain of public sector are more inclined towards the national interest and they are not self centered as they put their personal interest secondary. The public sector organizations face constant competition from the private sector, NGO’s, the government of other countries, All these reasons justify as to why the models for the knowledge management are taken from the public sector unlike the private sector where the culture, the interest, perception and everything differs. However the traditional approach of the public sector sometimes becomes a hurdle in the development of knowledge (Burr and Girardi, 2003).

Every firm has its own set of requirements and based on them they create their model of knowledge management and technology is always changing so the public sector firms also adopt different technological infrastructure based on their requirements. There are a collection of technologies that are used in the process which together constitute the software. The reason why these firms spend so much on this software’s is because they need up to date information for better decision making. Government sector tries to incorporate IT into their solutions for better performance.

Knowledge Management and the Education in the Agricultural Sector

Generally the concept of knowledge management can be applied in all government sectors such as education, transportation, health care and so on. However, this paper will be focusing mainly on the education sector which can be uplifted and further developed by the knowledge management strategies. Education is by all means one of the most significant sectors of a countries economy. It is the back bone of the nation which paves the way for the future growth and development. Therefore this sector is given utmost importance because its development is the nation’s development (Cook et al, 2004).

We will take into consideration the education of the agricultural sector of the country through knowledge management systems. There are many ways to achieve this like research into innovative ways to develop the sector and the development of the learning programmes for the all the stakeholders for better yield and growth.

This can be done in a number of ways as follows:

The systems can be used to do an assessment of the human resource of the business. Human resource is the life blood of the business therefore their input plays a crucial role for the development of the sector.

The management systems can be used to facilitate agricultural sector through the deployment of case studies and various tools relevant to the agricultural education.

The sharing of the knowledge and the use of newer techniques and methods among the communities

The private sector can also help the public sector in meeting their goals through the induction of their systems and technologies.

Information and Communication Technology (ICT) has facilitated all the sectors. Similarly it can be used to impart agricultural information to employ newer software’s and implementation of newer systems to navigate the progress and learning (Watts and Lloyd, 2004).

Open and Distance learning is an effective tool which can be used by the agricultural sector to enhance their learning and can be used for the development of the professionals in the field.

Knowledge sharing systems can also be used to manage the work and distribute the knowledge among the stakeholders (Vilma, 2008).

Technology has advanced so much that it is on the sector and the expertise of the knowledge workers that are employed to make use of the variant opportunities and their knowledge to develop and upgrade systems which are able to meet the standards because there is no end to innovation and more and more learning tools and techniques can be employed with the passage of time for growth and development (Torgerson and Elbourne, 2002).

UK government increased ICT expenditure for the next three years

Those governments which have been valuing the concept of knowledge management will also reap benefits out of it. The UK government in the year 2008 increased their budget for the ICT to an amount of 2.9 billion pounds. The idea was to give a further boost to the education sector by utilizing the technology and improve governmental performance and strengthen the education sector of the country (Tearle, 2004).The main motives behind such a move were as follows:

Better coordination with the parents through online facilities

Newer learning methodologies for the improvement of the curriculum

Enhance the resources available to the sector and increased participation

This would also improve the performance of the educational sector through better monitoring and control

However in both the cases that is agriculture and the education sector of UK, the government takes all these measures then it has to look into the training of the staff because people need to be equipped with newer software’s and technologies and they need to be well versed in that in order to use it effectively (Tearle, 2004). By doing so the government also raises the opportunities and market for the firms in the private sector because then firms such as Microsoft and open source firms try to get into the market by being the supplier of technology to the sector, hence it creates employment and development of both private and public sector (John, 2002).

There are many specialized firms in the market which are willing to provide assistance to the government’s public sector initiatives through their advance systems. Companies such as Informa, it is specialized in providing advanced knowledge and services to the public sector. They have services such as data monitor, Informa Economics and Agra for the agricultural sector. The company has clients worldwide including governments and other corporate sector businesses such as Pfizer and EU and WTO. Hence the government has an opportunity to make use of external sources to improve their knowledge based systems in the sector (Paolo, 2010).

Innovations in the education sector mean the achievement of high standard of education. These are the performance measures used by the government. The role of knowledge management is to look for newer ways to develop the different institutions of the sector. Education gives a competitive advantage to a nation. This is why all the organizations are systemically looking for newer ways to achieve excellence. Through the use of knowledge management the universities will be able to retain more students and it will also help them in the research process. Knowledge management helps in the strategic management process (Polkinghorn,1992).

The government can make use of web based systems in which it can collect the grants from the donors. However those donors need information in order to make effective decisions and this is where knowledge management plays an important role as it helps the donors to decide and then function. It can be used to share information among grant makers. The organization can also make knowledge management systems and form a network in which they can share their problems and have person to person connections with one another for better understanding (John, ,2002).

There can be issues in the knowledge management because

The culture does not support knowledge management

Lack of funds for knowledge management

Lack of training

Uncoordinated knowledge management roles

Inability of senior management to incorporate newer measures and look for opportunities

Lack of competence of the firm to measure financial benefits (Steyn and Kahn, 2008).

Conclusion

The concept of knowledge management is not new to the government. The government has significant opportunities it and the related informational technology opportunities associated with it. However it is on the ability of the government that how well they able to integrate this concept into the organizational culture of the firm and promote knowledge management which will further help them to grow and achieve competency (Emma et al, 2005). Private and public sector firms have some form of similarity in developing a framework for knowledge management but the public sector organization needs to be more careful as it has stricter regulatory practices.

References

Alleman, J. (1992), Empowerment of Employees – Private Sector Models in Public

Education, Labor Law Journal, 43 (8), p477.

Beal, B.D. and Thomas, D.E. (2004), Strategic Options for Managing Intellectual

Asset Flows in the Information Sector, Journal of Managerial Issues, 16 (4),

p442-459.

Burr, R. and Girardi, A. (2003), The influence of social context factors on perceptions

of procedural justice in the public sector, Australian Journal of Psychology, 55,

p117-117.

Cook, S., Macaulay, S. and Coldicott, H. (2004), Change Management Excellence:

Using the Four Intelligences for Successful Organizational Change, Kogan Page.

Emma, P., Clare, K., Tim, M. and Shaun, T. (2005), Comparing HRM in the voluntary and

public sectors, Personnel Review, 34 (5) p588-602.

Emrich, A.B. (2005), Start ‘Knowledge Revolution’ Now. (cover story), Grand Rapids

Business Journal, 23 (49), p1-8.

Gurrieri, A.R. (2008), Knowledge network dissemination in a family-firm sector,

Journal of Socio-Economics, 37 (6), p2380-2389.

Hetland, H., Sandal, G.M. and Johnsen, T.B. (2007), Burnout in the information

technology sector: Does leadership matter?, European Journal of Work &

Organizational Psychology, 16 (1), p58-75.

John, O., (2002), Wiring Governments: Challenges and Possibilities for Public

Managers, Praeger.

Kelly, A. (2004), The Intellectual Capital of Schools: Measuring and Managing

Knowledge, Responsibility and Reward: Lessons from the Commercial Sector, 1

edition, Springer.

Milner, E. (2000), Managing Information and Knowledge in the Public Sector, 1

edition, Routledge.

Polkinghorn J.R. (1992), Accelerating “At-Risk” Students, Journal of Labor Research, 3 (1), p11.

Slabbert, A.D. (2004), Conflict management styles in traditional organizations, Social

Science Journal, 41 (1), p83.

Steyn, C. and Kahn, M. (2008), Towards the development of a knowledge management practices

survey for application in knowledge intensive organizations, South African Journal of

Business Management, 39 (1) p45-53.

Paolo, B. (2010), ICT for education projects, Information Technology for Development, 16 (3)

p232-239.

Tearle, P. (2004), A theoretical and instrumental framework for implementing change

in ICT in education, Cambridge Journal of Education, 34 (3), p331-351.

Torgerson, C.J. and Elbourne, D. (2002), A systematic review and meta-analysis of

the effectiveness of information and communication technology (ICT) on the

teaching of spelling, Journal of Research in Reading, 25 (2), p129.

Vilma, L. (2008), Sector reputation and public organizations, International Journal of Public

Sector Management, 21 (5) p446-467.

Watts, M. and Lloyd, C. (2004), Original article The use of innovative ICT in the

active pursuit of literacy, Journal of Computer Assisted Learning, 20 (1), p50-58.

Categories
Free Essays

Change management essay on McDonalds


Introduction

Change management can be defined as ‘the process of continually renewing an organisation’s direction, structure, and capabilities to serve the ever changing needs to external and internal customers’ (Moran and Brightman, 2001). As per Burnes (2004) change is a feature which is always present in the life of organisation. It exist both at operational and strategic level. The organisation is aware about where the change is required and is fully capable of planning and implementing these changes in its structure .According to Burnes 2004; Rieley and Clarkson, 2001, the organisations strategy and organisational strategies are something which goes hand in hand and cannot be separated. In the words of Graetz, 2000, ‘Against a backdrop of increasing globalisation, deregulation, the rapid pace of technological innovation, a growing knowledge of workforce, and shifting social and demographic trends, few would dispute that the primary task of management today is leadership of organisational change.’

In early times the theories believed that if the organisation keeps changing management system then it can no longer run effectively nor can it make any improvement in performance (Rieley and Clarkson, 2001). It was believed that the company had to bring new management theory into routine in order to achieve efficiency and improvement in the performance. This Means that an organisation has to give ample time for a particular change to be adopted and settle down in daily routine so that it can be run in efficient manner (Luecke, 2003).However in today’s time It is believed that staff of the organisation should go through continuous change to achieve efficiency (burnes, 2004; Rieley and Clarkson, 2001)

According to Grundy, 1993 ‘change which is marked by rapid shifts in strategy, structure or culture, or in all three.’ Senior, 2002 adds to it saying that this kind of sudden change or implementation can be caused only due to malfunctioning of the internal structure or it can be caused due to external pressure.

Every organisation is looking to move forward by implanting a management system with will boost organisations strength and capability, enhancing its competitiveness. An organisation has to deal with unforeseen situations in today’s highly competitive environment and to deal with this it has to be more flexible and ready for any situational changes that it will have to make, like adoption of new technology or some latest development in theory for current market. In the fast moving economic environment there continuous changes in the type of technology, the way the product is marketed, trends etc. the organisation has to be more flexible to adopt changes in order to remain competitive in the global market. Change can be good in a way; it can make complex work very simple and helps to improve lives through new innovations.

Organisations bring change in their working structures to be more competitive and providing the best to their customers. As per Carlpio (1998) change is something to do with implementation of new innovative ways of doing things, enabling the room for improvement in the system through practice. Number of changes can be introduced in the system but the one which brings success to the organisation is considered to be the most important one of all.

A change in management system is important specially when a particular system which the running organisation is facing difficulties or has some problems with it. Changes are brought in to improve the organisations performance. Changes are mostly brought due to forces which can be internal or external yee, 1998. Changes can be brought at different level of an organisation (Swenson, 1997) The modification needed or which can be done maybe many or quite a few (Reigeluth, 1994).

There could be various factors for change (Bamford and Forrester, 2003). Change can be either internal or external. External include new technology which is current requirement of the industry or trend in the current economy which may have direct impact on profitability of the business.

A structured method of change was adopted in 1946 by Lewin (Bamford and Forrester, 2003) what lewin had to say was something different than the old theories, he mentioned that in order to apply any new theory or change management an organisation will have to first discard it’s old management structure or system. Management of changes pays a role in identifying objectives of the organisation and then sets goals accordingly. Its role is to implement new changes in the organisation in which it can be noticed that these changes ultimately bring innovations. The first step towards organisational change is to understand the requirements of the organisation and issues with the current management structure.

The purpose of the paper is to provide insight of change management process in the chosen company which is McDonalds and provide solution and recommendation for the same.

Overview of the company

McDonalds is a company with mile stones of success which was started in 1954 by Ray Kroc as a burger shop which was then turned through extensive marketing planning and campaigning making it a global brands in today’s time. It is renowned fast food brands all over the world with more than 32,000 branches in 117 countries.McDonald’s trade mark was a carefully created and was a successful hit which was a clown with a smile. The big Mac is one of the most successful products of McDonalds.

McDonalds offers a menu which is almost the same all cross the world. The menu includes burgers, hamburgers, cheese burgers and drinks include soft drinks with fries. McDonalds target customers includes kids, teens and families. It is now the most renowned brand in fast food that sells ready to eat and quickly served fast food.

In spite of being a famous brandMcDonaldsis still facing some issue and needs to change its management structure and image as the people in current time have a bit different expectations then those in previous days (McDonalds 2010)

In today’s time people have become more diet and health conscious and are now moving towards food which is healthy and has more nutritional values. Fast food has always been known as junk food with no nutritional value and the popular opinion was that fast food results into obesity by increasing fats in the body. Today’s generation is more figure conscious and are looking forward for food which is low fat and high in proteins.

McDonaldsis facing problems as it is a well established fast food brand and fast food is always related to unhealthy and fattening food, while competitors ofMcDonaldshave already made a move towards health conscious products by introducing entire new range which is healthy and non fattening. McDonalds needs to change the way it markets itself and also need to introduce a new line of products, as per expectations of new generation’s customers.

Scope of change

Advertising and marketing places an important role in establishing an image of the company in the eyes of the society in which it operates. The scope of change widely lies in the implementation of integrated marketing strategy. In this paper the importance is given to marketing and advertisement part as to launch new range of healthy products, the company has to implement new marketing practises.

The new marketing campaign will adopt a new health conscious process which will flow along with a trend of fitting with health related issues like obesity in young children’s and create awareness about health eating practises. The main objective of this campaign is to promote its new products which are healthy and contains low fats. This will help create positive image of McDonalds among the customers and make them aware of new products which are healthier than the earlier once.

To execute these plans the company has to plan its new strategy of advertising and marketing ideas and put a team in place to implement this strategy. The company has also introduced new smoothes and shakes along with healthy breakfast which is available before 12 in all the branches in UK. The marketing integrated campaigns main aim to reflect company mission and new attitude is been seen by the public through companies new promotion and marketing plans.

Problems in implementing change

When implementing change, conflicts will always follow. There are always conflicts on the route towards changes either before or after it has been initiated. Change in management can be the reason to bring success or failure to an organisation; however conflicts can bring problems if there are not resolved in time as they can bring obstacles in the new management structure introduced. The management has to be aware that it should be capable of not only introducing necessary changes but also be able to implement them effectively clearing all the obstacles.

The main reason to bring changes in the organisation structure especially through marketing campaign is to improve the image of the organisation and to make the company more competitive in its industry. The company might have to face many obstacles in doing this and these obstacles can be both external and internal.

It is important to know the consent of the stakeholders of the organisation as they are very important part of the organisation. Stake holders include share holders, customers, supplier and employees. It is important for an organisation to keep all its stakeholders happy because if they are happy then it’s beneficial for the organisation.

But there will conflict due to changes as there will be resistance from the side of employees or customers themselves as often people resist changing. There may be employees or customers who would accept the change happily but the problem is with those who do not agree with new management system which is to be implemented. Most of the time they may think that the change which has been brought is nothing to do with the issue or it may worsen the situations. I it may also happen that within employees they might not trust people who are in charge of this new change.

Employees are not the only one who creates obstacles for change sometimes even the customers are not ready for change. If they do not take to change positively then this may create issue for the company to achieve its goal for the change.

Along with this another problem that McDonalds may face is finding the right staff to drive this change that will be responsible to deliver these changes in department of marketing and communication.

In addition to from employees and customer’s resistance there can be other barriers this may affect the process of change. The strategic implementation is important part of changes; complications in this can be problematic for the company. There can be many other issues which can create barriers in changes such as conflict in view of share holders or the problem in finance and lack of budget of the company another problem can be sustaining the process of change.

As per carlopio 1998 innovation is something that does not happen in a day it takes series of phases to finish the process of change. Staff involved in this change management process must undergo some kind of training and learning procedure to make them competent to sustain the series of change until it attains success. Inability to handle or lack of experience and knowledge in implementation of strategic change may not be able to achieve integrated marketing and communication strategies.

So to overcome the problem of negative response the management of the company should make the staff go through necessary training and development programmes. The training programme should be such that it should provide complete understanding of the programme to the members of the staff. It should make sure that none of the information is missed in the training programme. After the programme there should be a follow up to check if all the members have understood and have sufficient information to support change.

There can be internal conflicts between the members of the staff due to cultural issues. This bring problem in harmony of the members in the organisation, leading to conflict within the company. McDonalds must understand the cultures of its employees and should identify the problem that may be caused because of the conflicts if any (wikins and Dyer, 1998)

McDonalds should incorporate governance in the system to enhance the quality of staff and the time spent by them at the work place. Different appraisal policies can help to boost employees. Working environment can also be improved so that staff members can have a good time while working for the company which at the same time also benefits the organisation.

Strong organisation culture along with good management team is needed to solve such internal conflict issues. The second most important change is to sustain the success that had been achieved through implementation of new management process. Change is part of the society and it comes again in regular interval of time (Carlopio, 1998).

For the success of change management it is important that all the stakeholders know or are made aware that current change has been brought for the betterment of them. The management of the organisation should constantly analyse the current market trends and predict future scenarios, so that it can prepare itself for next set of change that will be required for the success of the organisation.

Recommendations

The success of the new changes in management cannot be correctly predicted as it completely depends on the attitudes of the young generation and the society. Changing the image from fast seller to a company who provides healthy meal is not a easy process, but with strong marketing campaigns and advertisement the message can be sent to people and there is a chance that this message will be delivered. It is imperative that the new image of McDonalds reaches all 117 countries. After this message has been promoted there is a chance of getting rid of the critic’s comments that McDonalds brands have unhealthy and fattening.

In other words innovation can be explained as a bunch or new ideas which have been successfully implemented (Kuhn, 1993). Innovation can be led by two factors which is technology based innovation and the second one is demand based innovation. However most of the innovations are charged up realisation of demand instead of technology.

Changes are mainly driven by constant research and development, performed by companies and R&D is given a lot of attention. Apart from R&D there can be other ways of bringing innovation and one of the simplest ways to keep improving working practises while in the daily routine. Combination of knowledge and extensive work experience can help to innovate a new a better way of doing things. Radical innovation always come from the R&D department of the company but innovations which are incremental can only come from through practice (Lundvall, 1992).

McDonalds will have to plan and implement its new marketing campaigns effectively with effective ways of doing it. The company has to take care that its internal staff is competent in delivering the outcome and that is minimum resistance from the internally. There is a good chance that McDonalds can change its image in food industry from junk food supplier to a health conscious meal provider.

Conclusion

As per beverage 2003, the management of the organisation has to be on toss all the time to keep the organisation up to the market expectation. They have to continuously analyse and monitor current market conditions so that that they are aware of the current standing of the company in the market. To bring innovation the management will have to keep a check on which ideas are working and which are not doing well when implemented and accordingly change the management structure. To implement a management change the leader must create a environment which is safe and will support new changes in the organisation.

A above all It can be said that a change in management is good only if that particular change has potential to improve companies competitiveness in the market and bring more success to the organisation. The organisation should keep monitoring current situations and make changes only if it is felt necessary, as change in organisation is a complex decision and has direct impact on the image of the organisation. With proper care and preparation and organisation (McDonalds) can survive the toughest competition.

References

Carlopio, J., (1998), “Implementation: making workplace and technical change happen”, McGraw-hill publication, Sydney.

Yee, J.A., (1998), “ Forces motivating institutional reform”, http://www.ericdigests.org/1999-1/reform.html. Accessed March 2011.

Swenson, D.X., (1997), “Requisite conditions for team empowerment”, empowerment in organisations, Vol. 5 No. 1

Reigeluth, C. M. (1994). The imperative for systemic change. In C. M. Reigeluth & R. J. Garfinkle (Eds.), Systemic change in education (pp. 3-11). Englewood Cliffs, NJ: Educational Technology Publications.

Wilkins, A., Dyer, W. Jr (1988), “Toward culturally sensitive theories of cultural change”, Academy of Management Review, Vol. 13.

Kuhn, R.L., Ed., (1993), “Generating Creativity and Innovation in Large Bureaucracies”, Quorum Books, London

Lundvall, B.A., (1992), “ National Systems of Innovation: Towards a Theory of

Innovation and Interactive learning”, Pinter, London.

Beverage, w. M., (2002), “slow change in fast culture”, Educause review, pp. 10-11.

Moran, J. W. and Brightman, B. K. (2001) ‘Leading organizational change’, Career Development International,

6(2), pp. 111–118.

Burnes, B. (2004) Managing Change: A Strategic Approach to Organisational Dynamics, 4th edn (Harlow:

Prentice Hall).

Rieley, J. B. and Clarkson, I. (2001) ‘The impact of change on performance’, Journal of Change Management,

2(2), pp. 160–172.

Graetz, F. (2000) ‘Strategic change leadership’, Management Decision, 38(8), pp. 550–562.

Luecke, R. (2003), “ Managing Change and Transition”, Harvard Business School Press, Boston

Burnes, B. (2004) Managing Change: A Strategic Approach to Organisational Dynamics, 4th edn (Harlow:

Prentice Hall).

Bamford, D. R. and Forrester, P. L. (2003) ‘Managing planned and emergent change within an operations

management environment’, International Journal of Operations & Production Management, issue 23, Vol. 5

McDonalds, (2010), “about McDonalds”, http://www.aboutmcdonalds.com/mcd, viewed on 5th march 2011.

Categories
Free Essays

Information management systems ‘’Purpose and need for information systems in small and medium business enterprises’’

1. Introduction

This project intends to investigate the impact of information system on the success of Small and medium enterprises. Almost all the successful big enterprises have embraced information system in their various businesses. It is generally believed, that information technology enables a firm to access information needed to make decisions, to make an efficient use of resources by reducing labour and manufacturing costs, to seize opportunities in its markets and to position itself effectively in relation to its contenders (Dirks, 1994).Unfortunately, it is the same environment both big and SME’s operate and there is a need for the small enterprises to survive in this environment.

We live in a very competitive world with the competition becoming fiercer. It has become so volatile that it takes more than success to stay alive. The threat posed to SME by the big enterprises is such that they can be swallowed at anytime. One of the ways by which SME’s can achieve a competitive advantage in the era of globalization is through the implementation of IS in their organizations.

Implementation and practice of IS comes at a cost and its increasing high cost is a concern to management, especially in SMEs sector. With lack of sufficient funds to acquire such skills smaller organizations often implement IS in a less than optimal way, thereby attaining fewer benefits than larger organizations (Delone, 1988). The decision to invest the few available funds on information technology need to be worth it as SME’s don’t have the luxury of fund big enterprises have.

Traditionally, the success of Information Systems (IS) has been studied in the context of large organisations, most businesses, however, are small and medium

Enterprises (SMEs) and they have increasingly adopted packaged application software to meet their information processing requirements. Small- and medium-sized enterprises exert a strong influence on the economies of all countries, particularly in the fast-changing and increasingly competitive global market (Anaroni 1994; Drilhon and Estime 1993). They have been a major engine of economic growth and technological progress (Mulhern, 1995; Thornburg 1993). Carrier (1994) said that SMEs are often more fertile than larger firms in terms of innovation. Most IS research focuses on large firms, yet the majority of firms in most economies are SMEs.

It is amazing how SME’s form the bedrock of every country’s economy yet they always find it hard to survive not to talk of competing in an environment where the big enterprises have enormous edge. Though these SME’s can’t match the financial investment of the big enterprises, they need to find a way of balancing their investment to keep abreast of what is happening in their environment. Some SME’s have decided to overlook the cost of investing in IS as they

2. Literature Review

Given the dominance of worldwide competition and high rate of technological change, there will be some challenges, which most SMEs are likely to have in common (Marri et al., 2000). Blili and Raymonds (1997) identified the need and usefulness of information systems strategies (ISS) in small and medium sized enterprises (SMEs). In the transformational role, IS helps to

Fundamentally redefine and alter the business processes and business relationships. These benefits could range from simple cost reduction to creation of new businesses or enhanced organizational capabilities (King and Teo, 1996; Feeny and Willcocks, 1998). Palvia and Palvia (1999) stressed on key areas of IT dissatisfactions that are: training and education, software maintenance, documentation and vendor support. According to them software

Vendors and consultants can appropriately address these deficiencies. These issues can be addressed well by having a proper IS management in place in an organization. Poon and Swatman (1999) reported on internet use in small business sector as a part of IS management and found that although use of e-mail was very popular for business communication and documents transfer, there was almost no integration between the Internet and internal applications.

2.1WHY DO WE NEED INFORMATION SYSTEMS

Information has become very important to the modern business organization that it is seen as its lifeblood. Information systems help an organization manage and make efficient use of its data to achieve utmost success. There has been more information produced in the last 30 years than during the previous 5,000. … The information supply available to us doubles every five years. Information system enables companies to react, respond, cater, store, retrieve, disseminate, and control their new valuable asset that is information. In the years to come, a good information system within a company will be no longer an option; it will become a compulsory in determining success.

The term IT is defined in broad sense as ‘‘technologies dedicated to information storage, processing and communication’’ (Ang and Koh, 1997). This notion of IT focuses on a combination of hardware, software, telecommunications and office equipments that transform raw data into useful information for speedy retrieval (Seyal et al., 2000). Blili and Raymonds (1997) identified the need and

Usefulness of information systems strategies (ISS) in small and medium sized enterprises

(SME’s).

2.2 INFORMATION SYSTEMS IN SMALL AND MEDIUM ENTERPRISES

Many smaller firms now utilize computer-based information systems (IS). Top managers in these small firms have a crucial role to play in the development of IS, but the nature of this role differs sharply from that usually undertaken by the senior manager of the larger firm (Martin,J 1989) There is little doubt that advanced information and communication technologies (IT) are changing the way businesses operate and conduct commerce. As the advent of a more secure Internet and new transmission standards makes it easier and cheaper for businesses to conduct inter-organizational commerce.( Khazanchi,D 2005)

2.3 OUTCOME OF INFORMATION SYSTEMS IN BUSINESS ENTERPRISES

IT investments had a positive relation with the IS management practices.

Increasing investments in IT and strategic role played by information systems (IS) make IT

Implementation as an important research issue within the MIS discipline (Bostrom and

Heinen, 1977). Schein (1992) and Zuboff (1988) outlined three major roles that IS could play in an organization:

(1) Automate;

(2) Informate; and

(3) Transformate.

The automate role refers to mere replacement of labour processes by technology. In the

Informaterole, IS provides data and information that empowers different levels of

Management andorganizational employees. In the transformational role, IS helps to

Fundamentally redefine and alter the business processes and business relationships. These

Benefits could range from simple cost reduction to creation of new businesses or enhanced

Organizational capabilities (King and Teo, 1996; Feeny and Willcocks, 1998). Palvia and

Palvia (1999) stressed on key areas of IT dissatisfactions that are: training and education,

Software maintenance, documentation and vendor support. According to them software

Vendors and consultants can appropriately address these deficiencies. These issues can be

Addressed well by having a proper IS management in place in an organization.

3. Research Objectives and Research Questions

The general objective of the study is to ascertain the need for information systems in modern day small and medium business enterprise. How much are they loosing out as a result of their unwillingness to invest in information system or is the price being paid for the competitive edge provided by information system too expensive?

It looks at the benefit accrued to the small and medium enterprises that have embraced information systems.I wish to create a relationship between the cost of investment in information systems and the gains accrue to small and medium organizations that have embraced it. I also intend to look at how small and medium entrepreneurs feel about the need for information systems in their business. It will also be interesting to know how much they are willing to invest in information systems even if they feel it is needed.

4. Research Design

Research methodology involves qualitative method due to the nature of the work. It will be ideal to get detailed information about the operations of the small and medium enterprises because they have different challenges; these challenges affect the running of the organizations in different ways. I intend to carry out a series of one on one interview with a number of small and medium entrepreneurs. There are two categories of entrepreneurs that I wish to interview, those that have embrace information systems and those that are yet to.

5. Data collection and analysis

Both primary and secondary data will be collected for this project. Primary data will be collected from SME’s especially through interview and It is intended to retrieve the required secondary data from available financial sources to measure the performance of enterprises that use IS and those that don’t use it, only data from regulated bodies will be processed

6. Time Scale

Working to meet the project submission deadline, there will be critical reading of relevant materials, regular meeting with the supervisor and also to conduct interviews with some SME business owners.

References

Ang, J. and Koh, S. (1997), ‘‘Exploring the relationships between user information satisfaction’’, International Journal of Information Management, Vol. 17 No. 3, pp. 169-77.

Blili, S. and Raymonds, L. (1997), ‘‘Adopting EDI in a network enterprise: the case of subcontracting SMEs’’, European Journal of Purchasing & Supply Management, Vol. 3 No. 3, pp. 165-75.

Bostrom, R. and Heinen, J. (1977), ‘‘MIS problems and failures: a sociotechnical perspective-part-the Causes’’, MIS Quarterly, Vol. 1 No. 3, pp. 17-32.

Delone, W.H. (1988), ‘‘Determinants of success for computer usage in small business’’, MIS Quarterly, Dirks, P. (1994), ‘‘MIS investments for operations management: relevant costs and revenues’’,

International Journal of Production Economics, Vol. 35, pp. 137-48.

Feeny, D.F. and Willcocks, L.P. (1998), ‘‘Core IS capabilities for exploiting information technology’’, Sloan Management Review, Vol. 39 No. 3, pp. 9-22.

Khazanchi, Deepak,(2005) Information Technology (IT) Appopriateness: The contingency theory “FIT” AND IT implementation in small and medium enterprises, The Journal of Computer Information Systems

King, W.R. and Teo, T.S.H. (1996), ‘‘Key dimensions of facilitators and inhibitors for the strategic use of Information technology’’, Journal of Management Information Systems, Vol. 12 No. 4, pp. 35-54.

Martin, C.J. (1989), ‘‘Information management in the smaller business: the role of the top manager’’

Marri, H.B., Gunasekaran, A. and Grieve, R.J. (2000), ‘‘Performance measurements in the Implementation of CIM in small medium enterprises: an empirical analysis’’, International Journal of Production Research, Vol. 38 No. 17, pp. 4403-11

Palvia, P., Means, D.W. andJackson, W.M. (1994), ‘‘Determinants of computing in very small business’’, Information & Management, Vol. 27, pp. 161-74.

Palvia, P. and Palvia, S. (1999), ‘‘an examination of the IT satisfaction of small users’’, Information & Management, Vol. 35, pp. 127-37.

Poon, S. and Swatman, P. (1999), ‘‘an exploratory study of small business internet commerce issues’’, Information & Management, Vol. 35, pp. 9-18.

Schein, E.H. (1992), ‘‘the role of the CEO in the management of change: the case of information Technology’’, in Kochan, T.A. and Useem, M. (Eds), Transforming Organizations,OxfordUniversity Press,Oxford.

Seyal, A., Rahim, M. and Rahim, N. (2000), ‘‘an empirical investigation of the use of information Technology among small and medium business organizations: a Bruneian scenario’’, The Electronic

Journal of Information Systems in Developing Countries, Vol. 2 No. 7, pp. 1-17.

Zuboff, S. (1988), In the Age of Smart Machine: The Future of Work and Power, Basic Books,New York, NY.

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Free Essays

Comparison of the approaches to operations management in Barclays Plc. and Toyota Motor Corporation

Summary

This assignment looks at the operations management of the two large organisations in their respective sectors. The organisations discussed are Toyota Motor Corporation, an automaker giant, and Barclays PLC, a financial services giant. I have discussed competitive priorities, marketing strategy, capacity planning, inventory management, supply chain design, performance measures and total quality management. All these help the organisations gain competitive advantage over other competitors as they focus on different ways to lower the cost of operations and making the best use of the resources by ensuring that all the waste is eliminated. The insight has been provided as to how these goals can be met to achieve the competitive advantage and how the innovation and long term sustainability of the companies can be achieved successfully.

Introduction

The following article discusses and compares the processes, priorities and strategies used in two huge organisations in different sectors. We would be discussing Barclays PLC and Toyota Motor Corporation. The reason for the discussion of these two companies is that they are well renowned in their respective sectors.

Barclays is a global financial services company headquartered in London, United Kingdom. In the 2010 Forbes magazine’s list of world’s leading companies it was ranked 9th largest banking group and 21st largest company worldwide.

Toyota is a multinational automaker headquartered in Toyota City, Japan. In 2010 Forbes magazine’s list of world’s leading companies it was ranked 360th, a steep fall from its 3rd ranking in 2009. This was partly because of a major accelerator problem with its cars which forced Toyota to recall millions of cars worldwide and partly because of decline in sales amid the global crisis in automobile industry.

Main Body

Identifying Different Operations

Barclays

Being founded in 1690, it now operates in more than 50 countries and employs over 147,500 people. It has over 48 million customers worldwide. It operates in different sectors which include Credit Cards, Retail Banking, Corporate and Investment Banking and Wealth Management. It has a primary listing on London Stock Exchange and a secondary listing on New York Stock Exchange. We will be discussing the retail banking operations of Barclays in this assignment. (Barclays, 2011)

Toyota Motor Corporation

It was founded on August 28, 1937 and it employs over 320,590 people. Its main business activities are motor vehicle production and sales. It is the world’s largest automobile manufacturer in terms of sales and production. It is a part of Toyota group which in addition to automobile industry also provides financial services and builds robots. In this assignment we will be dealing with the production aspect of Toyota.

Competitive Priorities

Toyota Barclays

Low Cost

Present

Present

Quality

Present

Absent

Flexibility

Present

Present

Time

Present

Present

Competitive priorities are the critical operational dimensions a process or value chain must possess to satisfy both internal and external customers.

Toyota’s main competitive priorities are concerned with its cost, quality and flexibility.

Toyota’s low cost operations enable it to produce products at low cost. This helps in setting low costs for customers and earning reasonable profit making the cars more attractive to customers and more competitive in the market.

It offers flexibility in its products. It offers a wide range of models targeting a wide customer base ranging from Aygo and iQ for low income families to auris, prius and corolla for medium earners to lexus, land cruisers and camry for high earners. The customers can also design their own cars and can choose what specifications they want in their cars which make them unique to others. It gives the freedom to customers and a sense of power.

Toyota maintains a high quality of standard in their production. They treat quality with utmost importance and that’s why when quality is mentioned the name of Toyota springs in to the mind of the customers. This gives Toyota the edge over its competitors.

Barclays has a competitive advantage of low cost operations. To gain the benefit from low cost operations over its competitors Barclays has moved its back-office jobs and the call centres to India where cheap labour is available. As India is a IT hub so the cost is also saved by not needing to invest in training and hiring of people.

Barclays offers flexibility in its bank accounts. It offers 13 different types of current accounts for the customers to choose from which are in addition to the business accounts, premier accounts and the saving accounts. A wide range of these accounts mean that the customer can evaluate what suits best to their circumstances and is more likely to be choosing it over other accounts. (Current Accounts, 2011)

Barclays lacks quality in the customer service. As of September 2010 bank complaints ranking recorded by Financial Services Authority (FSA), Barclays was rated 2nd clocking in 259,266 complaints for the six months period with only Lloyds being the worst. (BBC News, 2010)

It tries to serve the customers in time. In September 2010 bank complaints survey it was revealed that 91% of the complaint cases were dealt with by Barclays in the given timeframe of eight weeks.

Marketing Strategy

Corporate strategy provides a direction that serves as the framework for carrying out all the organisation’s functions. It specifies the aims the company will pursue and identifies the growth objective.

ANSOFF MATRIX

Toyota

Toyota has a vision of making cleaner and environment friendly cars. It segments the market according to different regions as well as different people. It aims to target each and every person possible.

It has got environment friendly cars e.g. prius for those people who are environment conscious. It targets the middle and low income families with the economy cars and the up market customers with luxury cars.

It uses differentiated marketing as it has specified cars in specified markets. The models which it produces and provides in one country are not necessarily present in other countries e.g. it only provides two models in Pakistan whereas in America and Europe it provides loads others.

It focuses on what the customers in a specific country are concerned about. In the developed countries who are concerned about environment it provides Prius to attract the customers whereas this car is not present in Pakistan as not a large chunk of people are concerned about eco-friendliness there.

Throughout its existence Toyota has adopted all four marketing strategies discussed in Ansoff’s matrix to succeed and become the market leader it has been for so long until the recent accelerator problem occurred with its cars which was disastrous for it.

Barclays

Barclays is one of the financial industries that have invested heavily in the marketing. It keeps on coming out with different ways to keep itself in the public eye. It’s a main sponsor of different sports including football, tennis, golf, individual sponsorships, and the cycling in London. It is the official partner of one of the biggest football leagues followed in the world known as Barclays Premier League.

Barclays has achieved its growth by product development, market development and diversification. It diversified into the new business of cycle hire throughout Central London, United Kingdom.

It expands its business by market development by investing in new countries with its banking operations and then by product development by increasing its operations in those countries.

It is now operating in more than 50 countries and provides a wide range of services.

Barclays also indulges in other marketing activities. In June 2010 it launched an online game, 56 Sage Street, to target young people. It was also supported by activities on Facebook which is the largest social networking website.

It has also made advertisements that included waterslide and rollercoaster which are not typical for a financial institution. It takes people by surprise.

Capacity Planning

Capacity planning deals with setting out future capacity requirements after forecasting the future demands for that period. It’s straightforward to determine capacity requirements when demands for products and services can be forecast with a certain degree of precision.

Barclays can also use the Theory of Constraints to identify the bottlenecks e.g. the time the mortgage department takes to process the home-loan application. Once the bottleneck is identified the plans can be made to overcome the bottleneck. The personnel could focus on the bottlenecks to make sure that the resources are being fully utilised. The employees would be properly trained to make sure they fully understand and work to overcome the bottlenecks. Once the time issue has been resolved the bank can start looking for more constraints.

Toyota can use the capacity management to match the demand in busy periods. It knows the demand would be more at the start of the year as compared to the year end and much more when a new model is being launched. Past analysis can be used to predict the demands at different times of the year. It can arrange the staff in a way which would not cause any hindrance to its operations and would be able to meet the demand if not over do it. If it’s for a short time period the staff can be asked to do overtime. This might require paying more than the original pay rate but it would eliminate the cost of training, hiring and paying additional benefits.

The Theory of Constraints can be used to find out the bottlenecks which limit the production. Different ways of overcoming the constraints can be applied and personnel required to focus on removing the constraints. The employees in that department need to be properly trained to make sure they make the best use of the resources. Once the constraints are removed the company can move on towards identifying other constraints before they arise and cause problems.

Inventory Management

It is an important concern for managers in all types of businesses to plan and control the inventories in order to meet the competitive priorities of the organisation. Poor inventory management can seriously affect those organisations that operate on low profit margins.

Like any other bank Barclays’ only inventory is cash. It needs to be very careful with the inventory management to run the business. The cash that customers deposit is invested by the banks to earn money. The cash flow per day should be anticipated properly and it should be made sure that sufficient amount of cash is kept in the bank to serve the customers when they come for it. This level should be worked out so that they don’t keep so much cash which could have been invested elsewhere instead of keeping in the safe and hence results in lost value. On the other hand it should not be so less that it results in customers being denied money at any stage.

Inventory management plays a very important part in the manufacturing organisations e.g. Toyota. As Toyota deals in lean manufacturing so the inventory level for Toyota is almost zero. Less inventory results in savings as there are no inventory holding costs, cost of capital, storage and handling costs and taxes, insurance and shrinkages. While there are so much savings it is not without risks. The products need to be perfect to keep the process going as with TQM there is no inventory to cover up if something goes wrong. Toyota can keep a safety stock inventory just in case any breakage occurs in the production system.

Performance Measures

It is important to see how well the organisation is performing both for the manufacturing and service organisations. Key factors responsible for the success or failure should be noted and if possible the factors responsible for success should be exploited and those of failure minimised if not diminished.

Both manufacturing and service industries need to see if the performance measures meet the competitive priorities of the organisation.

Key Performance indicators could be set up to see if the performance is up to the mark. Barclays can use this to assess the quality of service provided by the staff. It can be noted by assessing the no. of complaints received in a given time period. The customer satisfaction surveys can also be handed out to customers to see where do they feel the lackings are. The steps can then be taken to overcome those problems. The following KPIs can be used to measure the performance of the organistaions.

Barclays

No. of accounts opened

No. of home loans approved

Staff turnover

Customer feedback

Share price on Stock exchange

Investor returns

New products offered

Toyota

No. of cars produced

No. of defects occurred

No. of injuries

New models introduced

Customer interest

Supply Chain Design

Supply chains permeate the entire organisation. It is hard to envision a process in a firm that is not in some way affected by a supply chain. The supply chains must be managed to co-ordinate the firm’s inputs with its outputs to achieve the competitive priorities of the firm’s enterprise processes. Supply chains are equally important for both the service as well as manufacturing sector organisations. As a firm grows big it can’t perform all its activities by itself and to gain that competitive advantage it needs to evaluate its options and outsource its less profitable activities or manage close relationships with a few reliable suppliers.

As the service sector industries like Barclays are concerned they can outsource quite a few of their operations. India being the hub of call centres for the US and the UK, the call centre of Barclays can be moved there which provides with cheap labour and trained staff. The contract could be given to companies and so Barclays would not need to hire the staff which would save it from paying out fortunes in redundancy costs if it ever needs to finish operations. As the staff would be already trained there would be no training costs and no hiring costs.

As Barclays deals with the important personal information of millions of clients it can outsource the delivery of documents to a firm that specialises in the handling of documents and provides a good reliable delivery. It would be cost effective as well as a competitive advantage as customers will see it a trustworthy brand who takes the clients’ security very seriously.

For a manufacturing organisation like Toyota, it needs to maintain close relationships with a few suppliers who clearly understand the true meaning of the brand and understand what quality the customers exactly expect of that brand. It should not go for a large number of suppliers who barely understand the brand as Toyota did and what was the first brick laid to the devastation of Toyota which saw millions of cars being recalled worldwide. Maintaining close relationships with a few suppliers instead of going in a large supply chains which include tier-2 and tier-3 help create that special bond. It helps achieve the “Just in Time” which is only possible through Total Quality Management.

All the companies involved in the supply chain need to be closely linked to each other and they should be expecting high quality from each supplier as they all rely on one another to provide the best value product to the customer.

Both Toyota and Barclays can outsource their payroll system to a specialist financial firm which would be both cost effective and would also be dealt with the experts. By outsourcing these activities they can focus on more important activities which are the basis of their businesses.

Total Quality Management

Total Quality Management is a philosophy that aims for achieving high level of process performance and quality. To achieve this it stresses on three principles which are related to employee involvement, customer satisfaction and continuous improvement in performance.

Employee Involvement

TQM plays an important part in both the manufacturing as well as service sector industries. It emphasises that everyone in the organisation must share the view that he is responsible for the quality of the product. TQM gives rise to effective teamwork which is the basis of quality circles, which became popular in the late 1970s after Japanese used them successfully.

In Toyota the employee involvement can be achieved by having quality circles and listening to the concerns of each employee in those teams. Every employee should be encouraged to come up with solutions. Every employee should be given the authority to stop production line as soon as quality problem is spotted.

Quality in both the manufacturing and service sector organisations is achieved in different ways.

ManufacturingService
1.ReliabilityTangible factors
2.DurabilityCourtesy
3.PerformanceTimeliness
4.FeaturesConsistency
5.ServiceabilityResponsiveness to customer needs
6.Conformance to specificationsAtmosphere

Continuous improvement

Customers today demand and expect high level of quality at a reasonable price. For the companies to survive in the long run they need to make quality in their products a top priority. This can be achieved through Six Sigma principle where the level of defects is reduced to approximately 3.4 parts per million. This in turn saves both time and cost and wins customer loyalty.

Barclays can achieve the total quality management in their operations in a number of ways. A timeframe can be set up in which a customer needs to be attended at any cost no matter how long the queues are. The customer needs to be greeted happily at his first contact and should be catered to in an efficient and effective way.

Toyota can benefit by reducing the waste and making proper use of the resources. The staff can be trained to use the plan-do-check-act cycle for problem solving. This helps to point out all those activities that don’t add any value to the product and new ways can be found to complete the production cycle in less time and eliminating those activities that don’t add any value to the product.

Customer Satisfaction

Customers are usually satisfied when their expectations regarding a service or product have been met. They often describe the satisfaction as quality.

This can be measured by Barclays in terms of how long it takes for a customer to be served after he entered the front door. The time should be set in which a customer needs to be served in the best possible way. The calls should be answered in a given time and staff should be properly trained to answer the queries. The atmosphere of the branch and the appearance of the staff members should be given importance to.

Toyota can make sure its customers are satisfied by making the cars of excellent quality in lowest possible cost to the customer. Quality should be inspected at every stage. Any defects would delay the entire process and hence delay the delivery to customer leading to the unsatisfied customer. The good quality would mean less wear n tear resulting in less warranty claims and a satisfied customer.

Evaluation of the operational concepts of Barclays and TMC
a) Capacity Planning

Barclays

The capacity planning would help Barclays as it would be able to anticipate demand and make sure it has got the right resources to meet any variations in demand. The demand variations could be studied using the past analysis and extra staff could be made available at busy times of the day or the year. The competitive advantage could be achieved by making sure that all the customers are properly attended and less staff made available at less busier times. The sustainable advantage could also be achieved by making best use of the resources in the most effective way.

Toyota

The capacity planning would help Toyota anticipate what model’s demand is going to be more as compared to the others. More emphasis could be laid on producing those cars whose demand is more and less production for the cars whose demand is comparatively less. This would help gain competitive advantage as producing the right amount of cars would save costs and no stock would need to stored. Sustainability in the long run can be achieved due to the economies of scale achieved.

b) Inventory Management

Barclays

The inventory management would help Barclays keep sufficient cash to keep its process working and at the same time investing it somewhere else to gain higher returns. The competitive advantage will be achieved by making the best use of the cash and gaining the maximum possible return out of it. This would help in long term sustainability of Barclays.

Toyota

The inventory management would mean keeping less stock and hence resulting in almost zero stockholding costs, insurance and tax. The space would also be free and hence used for other purposes. Maintaining safety stock would help them if they face problem at any point in time with the inventory or to meet an unexpected increase in demand. This all would result in cost savings and hence provide a competitive advantage.

C) Supply Chain design

Barclays

As Barclays has already outsourced its back office and call centres to India which is a hub of call centres and a greater awareness of IT so it gives it a competitive advantage above those competitors whose call centres are UK based because there is cheap labour available in India. Above that there are no hiring and training costs to be incurred. Innovation can also be achieved because when talent is pooled together from bright people in different parts of the world many new things are discovered which would not have been possible otherwise. This also helps with the long term sustainability.

Toyota

The supply chain design for Toyota would mean having close contact with a few suppliers who best understand the culture of the company. This would mean a greater understanding of what product is required and what quality is desired. The competitive advantage would be achieved because of close relationship. Discussion between the supplier and enterprise would also lead to innovation. This would also help with the long term sustainability of the company

d) Performance Measures

Barclays

The overall performance of the operations can be measured by KPIs or Balanced Scorecard. It can be found out that equal importance is given to all the four perspectives which are customer, financial, learning & growth and internal business process perspective. This would help achieve the competitive advantage and would also help in the long term sustainability.

Toyota

Toyota can measure the performance of its operations by setting up benchmarks and comparing the actual performance with the benchmarks. Reasons for not matching up with the benchmarks could be looked and proper measures could be put in place to meet up with the standards. This would help achieve competitive advantage and also help in long term sustainability.

e) Total Quality Management

Barclays

Barclays could use TQM to make sure all the resources available to it are properly used and given importance to. All employees work to the full of their potential and customers are given the best service possible. This would help Barclays gain competitive advantage over other competitors and also help in the long term sustainability. It would also help in the innovation.

Toyota

The lean production system adopted by Toyota eliminates its waste totally and helps achieve low production costs. This gives it a competitive advantage over other competitors. Competitive advantage could be achieved by saving costs and resources and sustainability in the long run can be achieved.

Conclusion

Operations management is very important for an organisation as operations are at the heart of the overall success or failure of the company. The topics discussed in this assignment for managing operations are capacity planning, inventory management, supply chain design, performance measures and total quality management. The companies under discussion here are Barclays and Toyota. Overall, Toyota is more cost effective and it pays great emphasis on lean manufacturing and JIT which is the key to effective use of the resources and cost reduction.

Bibliography

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Hall.Heizer, J., Render, B. & Rajashekhar, J., (2008). Operations Management, 9th Edition. Prentice Hall.

Categories
Free Essays

Considering the history of OCCM theory, explain to what extent OCCM theory simply records management practice of the time that the theory was developed as opposed to being in advance of practice and therefore providing new thinking.

Introduction

The culture of the organization determines how effective a business is. Peter and Waterman emphasized the importance of organizational culture in 1982 when they gave their theory about how organizational culture affected a business organization. However, it was not the first time that writers and scholars had brought attention to organizational culture as many other philosophers before that time had brought the issue that there was a link between culture and effectiveness of a business. For example, Blake and Mouton had already argued about this issue in 1969 and had claimed that culture was a major factor in determining the organization’s success.

Organizational culture

The theory of organizational culture dates back to the 1960s and even earlier when different writers gave different theories of what is culture and how it affects the business. There is no dispute over the definition of culture but there is an on going argument as to how this culture affects the success of an organization.

Organizational culture is a set of beliefs, customs, values and behavior. Drennan, (as cited in Bernard Burnes, p 44) gives the easiest definition “culture is ‘how things are done around here’.” This definition explains culture in the easiest words. Basically, the organizational culture theory emphasizes that organizations are like normal societies which have their own beliefs, norms and customs.

However, the theory about how culture affects the business is not as simple as the definition. Different writers argue on varied areas of culture and link them to the success and performance of the business. After the Second World War, the rise of Japan was linked to its powerful organizational culture. Studies were carried out to see how, and what cultures led to the success of Japan.

Change in organizational culture

Organizational culture is the main obstacle in introducing a change in the business practices. People’s beliefs, their customs and set of values are very difficult to change. For example, a change was introduced to stop gender discrimination and to give equal opportunities to both the genders. Even if that change was justified and introduced on a large scale in almost all businesses, still people found it difficult to accept it. They continued to think of women as unable to take on the responsibilities at the higher managerial levels and so, they remained at the low hierarchy levels in many organizations where the culture was strong enough to make room for this change.

Many theories about change in organizational culture and how to manage that change have been developed. The need for such theories arose when many businesses failed because the people did not accept the change they introduced in the organization. It is not easy to change the set of beliefs and norms, which develop over a long time and people get used to following them. This is the reason many businesses failed when they tried to be more effective by changing the way things were done. The failure rate was 70% of businesses, which tried to change the culture of their organization.

The components on which a culture is based, like the cultural model made by Cummings and Worley (as cited in study guide, pg46), which shows that the culture comprises of basic assumptions, norms, values and artifacts, are very difficult to alter. The culture of the organization develops over the years with past leaderships and customs and so, changing that culture by introducing some new techniques and work methods lead to de-motivation and dissatisfaction of the employees. Even if the employees accept the change, it is difficult to implement it.

The organizational change management theory explained the different methods of introducing change and managing it so that the failure rate decreases and the firms succeeds in implementing a change and benefiting from it in terms of increased profits performance. The OCCM theory, therefore, was not something the businesses were practicing before. Although many businesses knew the importance of culture and its role in determining the effectiveness of the business, most of them were unable to change the culture successfully to increase effectiveness. OCCM theory helped those firms to introduce change and implement them. This theory explained the ways of adapting the work force to the change, which had to be introduced. Hence, this was a novel theory, which not just explained what organizations already believed but it also provided them an insight into implementing the change successfully.

Implementing OCCM theory in organizations

The main issue with organizational change is not why it is important and when it has to be implemented but the main issue is how to put the theory into practice. Many writers have written theories and developed models to help businesses implement that change and manage it so that it brings the results they want. However, many of these theories are too complex to actually use in businesses. These theories were of little use for the managers and the people who were responsible for initiating the change.

Different theories of implementing change

The eight-step model given by Kotter is the most famous and it highlights eight simple ways, which can lead to a successful change. With this model, not only it becomes easy to avoid disputes and insurgence in the organization when some sudden huge change in the culture is introduced, but it also makes that change successful. The major concern when introducing change is the work force and their reaction to it. It is highly important to initiate the change in such a way that the work force does not get de-motivated and dissatisfied.

The eight-step theory given by John Kotter says that the person who is initiating the change should do it in the following way:

Communicate the need for change: this says that the manager should explain the various problems the business is facing and the possible causes. When a sense of urgency is created, the people inhabiting the organization will make up their minds for accepting a change.
Coordinate and interact: the next step is to ask the people to suggest different ways in which those problems could be solved. This would give them the chance of suggesting changes in the culture.
Make a vision for the change: after discussion about several methods and changes in the culture, a vision can be created about the change the business has to introduce. This vision will determine what the business wants by introducing the change in the organization.
Communicate: it is crucial to communicate the benefits of the change, the vision and the problems if change is not initiated, so that the people at all levels are satisfied and the risk of resistance is decreased.
Tackle resistance: while you will make sure that all the staff is satisfied, there will be people who will resist the change. Some business processes and structures will also make the change difficult to implement. It is important to tackle them well.
Make short-term targets: instead of making a list of long-term targets, it is better to create short-term goals and reward the workforce on the achievement of those short term targets. The short-term goals are achieved earlier and the people will see the result of the change, which will reduce resistance and criticism.
Implement change and try to improve: do not just introduce the change. It is also important to continually look for methods of improvement, which will lead to increased productivity.
Lock the change into the organizational culture: the change you introduce and implement should become the core of the organization and should become a major part of its culture. This is what cultural change is called.

The OCCM theory given by Kotter explains the process of change management in the simplest way. This theory is widely used in businesses and is very useful since almost all people, not just change leaders, can understand and follow the simple steps.

The OCCM theory given by Cummings and Worley (2001) is too complicated to follow. Very few businesses found those complex ideas useful. On the contrary, many other theories of change management explain very simple methods, which are too general. Those theories are of no use to the organization. Moreover, many writers commented on change management that the culture problems may be exaggerated and blamed for poor performance. Those writers pointed out that many managers may blame the culture for the ineffectiveness of the organization while in truth, the problem may be because of other reasons like poor communication or lack of coordination.

Another famous and useful OCCM theory is the planned change approach theory by Kurt Lewis, which was given in 1940s. This theory gained a lot of popularity since it emphasized on planning the change and then implementing it. It was the best theory until the industrial revolution when people criticized that it is not suitable for those people who run businesses in unpredictable surroundings. They argued that in those surroundings, there was no room for planning and they had to introduce sudden changes in their organizational culture. This is because the planned approach theory took quite a lot of time to introduce and implement change, which many businesses could not tolerate. It was only useful for those changes, which were not urgent. However, the results and the success rate from his theory were high enough as the planning process led to fruitful benefits.

Hence, the OCCM theories were overall useful in reducing the failure rate of businesses, which tried to improve their business performance by changing the organizational culture. Not all the OCCM theories were useful in making the change initiative a success, but there were some like Kotter’s model, which proved to be very practical, and a simple theory to follow.

References

Bernard Burnes, organizational culture and change management, 2010, vol 1, united kingdom

www.mindtools.com, kotter’s 8 step change model, 2011

Catherine Itzin and Janet Newman, ‘gender, culture and organizational change’, Routledge, 2001

Categories
Free Essays

Human Resource Management in the Hospitality Industry

Introduction:

There have been researches conducted on the importance of the human resource management and as the business environment has transformed into more competitive world, the importance of having an adequate and appropriate Human Resource Management cannot be neglected. The most important factor by which the HRM contributes towards the organizational success is to realize the differences between cultures while the business tends to experience internationalization. There have been many researches already being conducted in order to realize the different cultures, people having different attitudes towards the similar issues.

Due to several factors like globalization and internalization of the businesses, this has increased the focus of many authors to write about importance of culture and realize that removing the cultural difference will enable the company to improve the performance. In order for the business to prosper in the international market it is necessary to realize the difference in the local culture and realize the different norms and values in the local market, and this can easily be done by having proper Human Resource Management in the organization. There are many cases in which huge company experienced failure in order to enter the new market like China, this is mainly because the company is not able to realize the different and intense local culture, norms and unique values of the country, it creates difficulties in conducting operational and non operational activities like marketing and financing the company. Having HR department to support the organization, through intense communication across the company and also providing the required training and developing the needed skills in the employees can enable the company to become more competitive in the new market.

The difference in the culture and the importance of realizing the difference is very crucial in every sector of the business including the Hospitality industry. This industry is unique in kind since this is the only business in which the consumer is being brought to the product instead of taking the product to the consumer. Hospitality industry across the globe has experienced boost due to globalization concept, this research report is based on the book written by an author named Ulrike Ditzel, and the name of the book is Cultural difference in business life, understanding German and American Business Culture. This research study is being based on the importance of Culture in business related to the necessity of having appropriate HRM in hospitality industry. This report discusses the various issues that are being discussed by the author and the evaluation of the work is also being conducted which can be found during the research report many times, although this book makes it sure that realizing cultural difference is essential for hospitality industry.

Hospitality Industry:

In order to first realize that how HRM has grown to a more important role in the business especially in the tourism industry, it is first necessary to realize the current situation of the industry. After the industrialization of the globe the concept of viewing the world as a single market was introduced known as globalization; in other and simpler words, one country stop selling and other quits buying. due to globalization in the many people tend to travel more for many different reasons, especially for business purpose, tourism and many others, or it can be said that people are travelling more than before which has provided boost to the hospitality industry across the globe, and for many countries having adequate hospitality industry, it has become the major source of income, countries like Malaysia which has promoted itself as the best place for spending the vacation, places like Hawaii, these regions have experienced development due to the increase in the people travelling and visiting this place hence generating more income for the country (Knowles, Diamantis, Mourhabi, 2004).

Some places can be observed for having natural uniqueness providing those some benefits over other places, where people will love to spend their vacations, some places are very attractive for having historic background like Taj Mahal in India, or Moenjo Daro in Pakistan, people having interest in viewing the historic stuff love to visit this place. It can be therefore easily be said that the Hospitality industry has increased as compared to past years and tourism also played its role in the development of the industry, but still there are other factors like business which has more influenced the entire industry. For instance, Dubai one of the major financial hub before recession was the main country for many multinational companies to work and set their head office there, as the recession period is being over the state has again capture the sight of many businesses. Through the above discussion it can be observed that the main factor influencing the business sector is the globalization and therefore people travelling for business purpose has provided the fuel for the hospitality industry (Olsen, Zhao, 2008).

This can be considered that travelling for business purpose has also increased the people to travel for pleasure as well; there are many countries which are now connecting both industries in one form like Malaysia which is the most benefitted country amongst all, generating much revenue from this sector, since this country is being the technological hub for many countries and god has gifted this country with great many scenarios the management has able to maintain make it useful for the country. Therefore it can be said that the Hospitality industry has increased a lot and recently there are many factors which have played an important role in the development of this industry (Pizam, 2005).

By reading the research work conducted by the authors, the importance of Human Resource Management was observed and realized that the HR personal should always be present in the any business especially in the tourism industry. The following part of the report includes the various critical aspects of organization managing the adequate human resource management in working in the tourism industry (Tanke, 2000).

Importance of Human Resource in Hospitality Industry:

Likewise many businesses and industry, the hospitality industry has also realized the fact that employees are the most important asset of the organization. Especially in hotel business, having a good, qualified and hardworking workforce can distinguish between which hotel is good and which is bad. The human resource managers are able to cover almost every aspect of the hotel; this makes human resource management an integral and significant part of the management in the hospitality industry. After going through the document it is being realized that since hospitality industry is about providing better services to the consumers, therefore the quality of the hotel depends upon the labor force working in the hotels (Chon, Mair, 2009).

There are many different areas, improving them is the duty of human resource manager resulting in the overall better performance by the entire organization. The HRM department is responsible for hiring new employees, the newly hired employees can seriously affect the performance of the hotel which makes it necessary for the managers to hire the best and qualified workers present in the market by following appropriate hiring process, in which every candidate is critically evaluated and only those with the spark are being hired. The most important task for the HR manager is to get the most appropriate people for particular task, since in hotel industry, many workers tend to just participate in the work, as they think that there is nothing else to do, whereas hotel services require proactive employees which can make decision on the spot and can satisfy the customer query in time (Brotherton, 2003).

This report will also discuss the issues that are related with the HR manager in terms of managing the different tasks in the hospitality industry, but the most important task of the HR manager is to retain the highest quality employees, the main problem in doing this duty is the fact that many of the people do not want use this industry as the ending career, therefore the employee turnover in the hospitality industry is relatively much higher than other industry (Albercht, 2001).

After analyzing the document that is being also discussed in the start of the report, reading the document helped to realize that HR manager has to more strategic in terms of handling HRM issues in the industry (Aswathappa, 2010). In more critical aspect which can be realized is that since hospitality industry, the management need to handle the customers coming from different countries having different cultures and unique attributes, that’s what makes the HR department to have a broader perspective of duties in the Hospitality industry. Therefore the importance of Human Resource Management cannot be neglected in this industry, having customers coming from different cultures do have separate living standards and also the expectation varies. Therefore the training and development provided by the HR manager should enable the employees to cope up the issues related to the cultural issues arising (Brewster & Harris, 1999).

Moreover, when any company wants to open a hotel in the international market, or in other words a hotel which needs to go beyond the boundaries, it has to face some difficult issues in terms of managing the cultural factors (Browaeys, 2008). There are many examples of huge companies facing failure when entering into different countries. HR department has to play a significant role in this regard while maintaining the significant corporate culture and also to cope up the issues regarding the external environment (McManus, 2006).

Moreover in the global context in terms of hospitality industry, the HR manager also has to be more strategic in terms of rewarding and motivating the employees through different processes. Hotels which are able to provide appropriate training to the employees resulting in the enhancements of the skills and abilities of the employees make it possible for them to go upward in the career (Dash, 2007). Having appropriate HR department in the hotel provides the employees a gateway by which they can have proper guidance regarding any issue related to the performance or with the daily operational activities. Moreover this provides with the sense of security to the employees that they do have someone who can look after them whenever they commit a mistake (Edwards, 2007).

The above discussed importance of having appropriate HR manager and department is being extracted from the document that was supposed to lead. In that particular document, it was analyzed that having human resource management in the hospitality industry is must (Ferraro, 2006).

Importance of Culture in International Hospitality Industry:

There are many cultural factors that prevent the company, in this case hotel to operate in the other regions, this was observed during the analyses of the document that was required to consider, these issues become more critical when they are not properly treated, and for the providing the appropriate treatment organization needs to have appropriate human resource management. In order to manage the different factors, it is first essential to identify these factors and then the role of the HR manager in order to cope up with the issues, some important elements are (Hellibrand, 2008):

Social Structure:

This is very important for the hotels that are planning to open a new business unit in any other country. The social structure here represents the way people live in different countries, this is important to realize since, HR manager needs to hire the employees and train them accordingly. In different regions people do have different perspectives and different living standards, resulting in diversified population to target and attract, and also to hire people that are also from different social structure. HR manager in the hospitality industry can enable the organization to understand the basic difference in the social structure of the country from the country of origin (Keegan, 2002).

Language:

This comprises of the most difficulties from all the different factors in culture, a hotel going international or entering into a new country needs to face this issues, there are many examples like Coca Cola entering China and changing the pronunciation, as first it did not mean what was expected from it, moreover like many other businesses the importance of employees is also being realized by the hospitality industry and now businesses considers employees the most important asset of the organization, therefore HR manager needs to be proactive in dealing with the issues related to language problem in the new country. moreover HR manager in the hotel will able to develop the understanding in the upper management about the local culture and what are the different jargons and what are the norms of the language (Luger, 2009).

Even if the business is not international, hotel needs to accommodate people from different nations having different languages and act in their language can mean harmful whereas can also mean very normal in the local language in which the hotel is being working. Here comes the strategic role of the Human Resource Manager who needs to fill the gap that is being created by the language issues by holding appropriate session related to training the employees and also telling the management about the language differences (Paul, 2008).

Education:

Here the education means the level of literacy rate in the country, this has become a critical issue for the HR management because, organizations working in the country having low literacy rate will make it hard for the organization to find the most appropriate employee for the position. Moreover sometimes hiring less educated people will harm the services provided by the hotels, since hiring inappropriate employee in hotel can alter the services at very rapid pace, since in hotels direct customer interaction is being conducted, hence affecting the image of the entire organization (Poole, 1999).

Interests and Values:

HR manager has to realize that what elements are different in terms of interests in the new country, it is also possible that one thing which is given the most value in the country of origin means nothing in the new country, hence resulting in the failure of the entire business. Therefore the Human Resource Management needs to realize the difference between the interests and values of the culture and try to pose the hotel in an acceptable manner and decorate it in the similar way, so that potential customers can feel that they are in their own culture.

Economics:

Different currency rate, different factors driving the economy, varying financial sector, these issues are less related to the HR manager, but international hospitality industry needs to cope up with these issues that occur when management decides to internationalize the entire business.

Effects of Culture on Hospitality Industry:

After analyzing the hospitality industry in the context of the human resource management and cultural affects, it has been noted that the there are various elements that effect the cultures for the hospitality industry. Some of the key elements are discussed below;

Consumer Behavior:

One of the main important elements that has noted is that the consumer behavior is hospitality industry is changing with significant rates. As compared to the last couple of decades the behaviors of the customers have been changed and the main reason behind this change is the mode of globalization. As discussed in the above report that the since the business world has entered into globalization mode, the hospitality industry has managed to grow faster than ever before because the visitors now find this easy to move from one region to another easily and with many facilities (Mondy, 2008).

And since the customers have now visited many places across the world, the roles of human resource personnel have become more critical. Today, the human resource personnel have to ensure that they design the organizational policies and regulations according to the consumer behavior. But the changing behaviors of the consumers are restricting the human resource personnel to do so. Many of the companies and their HR departments are now planning and redesigning their strategies to ensure that the consumer behaviors are properly understood. As compared to the past few years, the HR personnel in hospitality industry have become more responsible to understand the needs and requirements of the customers and act accordingly.

Local Demand:

A part from the above critical factors of changes in consumer behavior, the local and regional demand of the customers has also noted to be changed. Especially after the global and economical crisis, the visitors do not prefer to visit the other locations outside the regions because it requires them to pay the expenses and due to financial crisis, every individual is suffering from the shortage of finances (Schuler & Jackson, 1999).

The HR department of hospitality industry again has to ensure that it clearly understands the local demand and design the organizational strategies accordingly to attract the potential customers and increase the sales and profitability. As this is the only way which is remained to adopt otherwise sustaining in hospitality industry is not an easy task to perform.

Brand Image:

Maintaining the brand image is also one of the critical jobs for the organizations and HR departments are one of the responsible departments to do so. The regional culture also creates many complications for the hospitality industrial companies to ensure that the brand image is saved from any harm. Today it is noted that many of the companies are operating efficiently and successful across the world and it is because of the regional culture (Rae, 2000).

Human Resource Issues in the Hospitality Industry:

Different levels of hotels big and small in the hospitality industry face difficulty in order to manage the human resource and also the relationships with the employees in any country or countries they operate in. There have been increase in the employees issue regarding the organizational culture; the cases for sexual harassments have increased which ultimately costs the organization to give from its profit (Wvans, 2010). There are many cases observed in which hotels are not following the health and safety issues regarding the employees or the customers and even different services provided to them in different phases. Many hotels are observed to have high employee turnover or highly staffed labor, which means the organization is having more employees than required. This is because of the lack of appropriate HR manager and department which are not fulfilling the different needs of the organization, as now days the HR department should be playing more strategic role instead of only restricted to traditional ways.

There are few major issues regarding the HR personals in the hospitality industry which was observed during the reading of the document presented by the author (Price, 2007):

Job Description: the main issue for the HRM in the international hospitality industry to is to develop an appropriate job description which can cover the entire employee area of the organization. The issue concerning this element is the fact that HR manager needs to incorporate every level of employee in order to deliver better services to the customers (Smith & Mounter, 2008).
Policies and Procedures: in order to develop the policies regarding the employees in the organization, the HR manager needs to be more proactive, since working in the international business environment needs to incorporate different cultures, as it has been discussed above in the report. Moreover the HR manager needs to deal with different laws and regulations depending upon the country or the countries they are working in. this mean that the HR manager needs to develop policies in which every aspect is being taken care off so that the management is able to have better relations with the employees. These policies must incorporate the different operational issues like sexual harassments and other problems that the employees are facing in their duties.
Inductions Process: it has been already being discussed above that the most important asset of the company are the employees, therefore working in the international business industry, hotel needs to have the most appropriate and hardworking employees so that they can perform much better. The entire induction process of the company should be strategically followed by HR manager (Wierzbicka, 1999).
Conclusion:

As the business environment is getting more competitive, organizations in different industries need to gain some access to those resources in which they have gain the competitive advantage to increase the profitability. The above report is being constructed in this similar regard, in which it was required to select an author which has written on the topic of culture and then the concepts earned through that book was being incorporated in this research report which is based on the importance of Human Resource Management in the international industry.

Therefore the report is constructed in a logical manner followed from the evolution of the Hospitality industry, in this part the different factors have been discussed which has resulted in the boost of the entire industry; the main factor which has influenced is the globalization. Then the importance of culture is being discussed and how the realization of the culture is important in the international business environment and also different factors of the culture are being discussed.

In the end part of the report, the importance of Human resource management is being discussed and how human resource manager can play its role in the development of the organizational performance. There are few issues also discussed in which the basic emphasis was on to have an appropriate inductions system by which the organization will be able to hire best employees.

References:

Albercht M H, 2001, International HRM, Wiley Black, USA & UK

Aswathappa K, 2010, International Business, Tata Mc Graw Hill, India

Brewster C & Harris H, 1999, International HRM, Routledge, USA & Canada

Brotherton B, 2003, the international hospitality industry, Butterworth-Heinemann, China

Browaeys M J, 2008, Understanding Cross Cultural Management, Pearson Education, India

Chon K, Mair T, 2009, welcome to hospitality, Cengage Learning, Canada

Dash A, 2007, IRHM, Tata Mc Graw Hill, India

Edwards T, 2007, International HRM, Pearson Education, India,

Ferraro E, 2006, Cultural Anthropology, Cengage Learning, USA

Hellibrand J, 2008, Cross Cultural Competences, GRIN, Germany

Keegan W J, 2002, Global Marketing Management, 7th E, Pearson Education, India

Knowles T, Diamantis D, Mourhabi J, 2004, The globalization of tourism and hospitality, Cengage learning, UK

Luger E, 2009, Hofstede Cultural Dimensions, GRIN, Germany

McManus J, 2006, Leadership: Project & Human Capital Management, BH, UK

Mondy R W, 2008, HRM, 3rd Edition, Pearson Education, India

Olsen M, Zhao J, 2008, Handbook of hospitality strategic management, Butterworth-Heinemann, UK

Paul J, 2008, International Business, PHI Learning, India

Pizam A, 2005, international encyclopedia of hospitality management, Butterworth-Heinemann, UK

Poole M, 1999, HRM, Routledge, USA & Canada

Price A, 2007, HRM in a Business Context, Cengage Learning EMEA, USA

Rae L, 2000, Effective Planning in Training & Development, Kogan Page, GB

Reddington M, Williamson M & Withers M, 2005, Transforming HR: Creating Value Through People, BH, GB

Schuler R S & Jackson S E, 1999, Strategic Human Resource Management, Blackwell Publisher, GB

Sims R R & Vares J G, 1999, Keys to Employee Success in Coming Decades, Greenwood Publishing Group, USA

Singh S, 2006, HRD and Managerial Development, Global Vision Publishing, India

Smith L & Mounter P, 2008, Effective Internal Communication, Kogan Page Publishers, India

Tanke M, 2000, HRM for hospitality industry, Cengage learning, US

Wierzbicka A, 1999, Emotions Across Languages & Culture, Cambridge University Press, GB

Wvans P B, 2010, The Global Challenge, Tata Mc G

Categories
Free Essays

Health, Safety & Environmental Management.

1.0 INTRODUCTION:

We are living in an era described as an environmentally conscious age, where every deed acted by humans in terms of development, the effect is being weighed in relation to our environment. Consequently this has prompted a substantial number of environmental regulations being endorsed to hold business organizations more accountable for their environmental responsibilities. These policies tend to focus on tackling such problems from the source, with the knowledge of how certain insignificant decisions taken by such organizations can have a detrimental effect on the environment as a whole. (Darnall et al 2008).

One of the strategies adopted by these organisations was to introduce a tool known as Environmental Management System (EMS) that can be used to achieve a high degree of environmental protection within the context of sustainable development. (Bansal and Bagner.2002). This tool was first developed by the British Standards Institute (BSI) identified as BS7750 published in 1992. By 1994 the European Commission published another management tool known as Eco-Management and Audit Scheme (EMAS).

According to Bansal and Bagner after an increasing demand for improved environmental performance by the United Nations, the International Organization for Standardization (ISO) was mandated to create an internationally recognised environmental management system called ISO 14001 which is being used up to date.

Over the years EMS has been seen as part of a policy frame work for establishing any type of organisation from Schools, hospitals to even shops. However, within the years researchers are beginning to question the authenticity of EMSs since organisations claim to have one, when infact they make no attempt to reduce their environmental damage. “In instances where EMSs enhances an organization’s environmental performance, critics argue that improvements are likely to occur within the organization’s operational boundaries rather than being extended throughout the supply chain.” (Darnall et al 2008).

Despite these emerging misconceptions EMS has been effective in reducing environmental impacts within and outside the organisations especially as fines and penalties are being enforced on non compliance of organisations by the regulatory bodies.

1.1 SCOPE OF THE REPORT:

This report will focus on EMS and how it relates to Eco campus, a tool established by Glasgow Caledonian University to regulate its environmental impacts. Furthermore, it will look at the positive and negative aspects of adopting an EMS, and the evidences of bronze and silver medals won by the GCU through implementation of eco campus and the steps towards achieving a Gold medal.

2.0 EMS AND ECO CAMPUS:

According to Coglianese and Nash an EMS can be described as a set of in-house policies, reviews, plans and functioning actions affecting the entire organization and its relationships with the natural environment. They went on further to say even though the specific institutional description of EMSs differ across organizations, all EMSs entail setting up an environmental policy or plan which goes through internal evaluations of the organization’s environmental impacts including computation of those impacts and how they have changed over time, creating quantifiable goals to reduce those environmental impacts, providing resources and training workers, checking implementation progress through systematic auditing to ensure that goals are being reached, correcting deviations from goal attainment and undergoing management review. Absolute incessant improvements are done on the model, which are anticipated to help organizations insert environmental practices deep within their operational frameworks so that protecting the natural environment becomes a fundamental component of their overall business strategy (Shireman, 2003).

Environmental management systems function under the Shewart and Deming cycle of continual improvement which can be actualized by a step by step procedure. . It is repetitive and based on the PLAN – DO – CHECK – ACT system. First of all, a re-evaluation of the institution is done and a plan is set out on how the review made can be improved. Next is to develop how to execute the plan and once the system has been implemented, it is verified frequently to see if it is performing successfully. Finally, any suggestions for improvements are implemented. The cycle then begins again so that the system is repeatedly improved and refined to have room for future changes. (ecocampus.co.uk). The figure below illustrates the process further.

Source: www.ecocampus.co.uk

2.1.0 TYPES OF EMS:

Presently there are quite a few recognizable standards in Environmental Management Systems, but most the recognised and certified are the:

ISO 14001: 2004 International Standard for Environmental Management.
Eco – Management & Audit Scheme (EMAS).
IEMA – Acorn Scheme.

(www.iema.net)

2.1.1 ISO 14001:

ISO14001 objective is necessitating an organisation to implement an Environmental Policy within the organisation fully supported by the top management, and outlining the policies of the company, not only to the staff but to the public. The policy has to be in conformity with Environmental Legislations that may affect the organization and stressing a commitment to continuous improvement. Emphasis should also be placed on policy as this provides the direction for the remainder of the Management System. (Hillary 1999). Furthermore, ISO 14001 has grown at a very fast rate, and has gained acceptance as the “model T” among management systems perhaps not as a flashy or advanced as others, but prescriptive, reliable, affordable (in terms of cost and effort) and perhaps most importantly it gets you there.

2.1.2 ECO- MANAGEMENT & AUDIT SCHEME (EMAS):

The EU Eco Management and Audit Scheme recognized as EMAS is a voluntary market based instrument designed to inculcate better environmental performance from all types of organisations. EMAS has also been intended to completely be well-suited with international standard for environmental management systems ISO 14001, but goes further in its requirements for performance improvement, employee involvement, legal compliance and communication with stakeholders. Uniquely EMAS requires organisations to produce an independently verified report about their performances. (www.iema.net)

2.1.3 IEMA – Acorn Scheme:

It has been mentioned by the Institute of Environmental Management and Assessment (IEMA) that Acorn Scheme is an officially accepted EMS standard suggested by the government, which offers a suitable step by step approach to environmental management using the British Standard BS8555. IEMA also described the scheme as a coherent practical tool that contains five stages of EMS implementation. Each stage is further subdivided into other individual stage profiles which match up to the schemes principle.

2.2.0 ECO- CAMPUS AND HOW IT RELATES TO EMS:

Eco campus has been defined by the ecocampus website as both an environmental management system and an award scheme for the higher education sector. The scheme allows institutions to be acknowledged for adopting certain sustainable key issues. The main aim of the eco campus scheme is to encourage, reward and provide tools to assist institutions in moving towards environmental sustainability through good operational and management practices.

The eco campus programme consist of four phases; Bronze, Silver, Gold, and Platinum. By working through these phases, the university will -:

– Renew its current environmental performance and plan how it can be improved.

– Develop procedures to implement the plan

– Check actual progress

– Ensure any recommendations for improvement and implement them.

The Eco campus like the EMS, share the same objectives which is to inculcate, promote and integrate steps, ideas, plans that have less effect on the environment. In terms of implementation Eco campus works in the same manner with the EMS which is the application of the four key steps “Plan- Do-Check-Act” and off course with the criteria of continual improvement. Basically an eco campus is a tool that helps institutions achieve sustainability through an EMS approach, the relationship being an eco campus is an EMS with a different name because it functions in an institutional organisation. The only difference between the two would be the award winning criteria your institution tends to gain by adopting eco campus, whereas EMS does not reward implementation especially in that manner (bronze, silver, gold and platinum).

2.2.1 THE AWARD WINNING CRITERIA:

The eco campus award criterion is based on the PLAN – DO – CHECK – ACT system and these four stages are awarded sequentially by the four medals assigned by the scheme. Bronze (planning), Silver (implementing), Gold (operating) and Platinum (checking and correct).

The bronze phase basically complements the “planning” and this has to do with how devoted the senior management are towards attaining a sustainable institution. Environmental awareness, training, baseline environmental reviews and drafting an environmental policy are the main key elements of the bronze phase. An institution must be able to show these four basic commitments before they can be certified a bronze worthy.

The Silver however is referred to as “implementing” and it requires the execution of the elements highlighted in the policy. It`s key elements include: legal and other requirements, significant environmental aspects, objectives, targets, programmes, and environmental policy.

The gold is recognised as “operating” and consist of resources, roles and responsibilities; competence, training and awareness; communication; documentation and control of documents; operational control; emergency preparedness and response.

Finally the platinum which is the checking & correcting requires monitoring, measurement of the success so far followed by the evaluation of compliance in terms of abiding by the restrictions placed & the non conformity, correctiveness, and preventive action. Furthermore control of records is required, internal auditing and finally the management review.(GCU Envirocampus, 2007)

3.0 POSITIVE AND NEGATIVE ASPECTS OF THE SYSTEM:

According to Glasgow Caledonian University/sustainability website EMS has the following beneficial qualities:

assists in obtaining a licence to operate and complying with legal and other requirements such as planning consents;
improves relationships with regulators;
helps to prevent enforcement or civil actions;
reduces hidden costs associated with legal action (including substantial draw on management time);
avoids fines and damages awarded from legal action through criminal or civil courts
improves operational and process efficiency;
reduces operating costs and resource use thereby increasing profitability;
reduces outlay on waste disposal;
gives the institution a long-term sustainable future;
develops relationships with stakeholders by satisfying investors’ lenders’ and insurers’ environmental performance requirements;
helps to obtain insurance at a reasonable cost;
enhances the internal and external image of the institution, making it more marketable;
helps attract and retain quality staff and students;
Reduces pollution and improves the environment.

And EMS has the following drawbacks:

requires human and financial resources;
takes time to convince people that it is worthwhile;
requires good communication and training;
can be time-consuming to implement and maintain

From the above mentioned list, it clearly signifies how the advantages of an EMS overshadow the disadvantages, and for an effective and organised improvement of an institution’s environmental activities, it is most recommended.

4.0 EVIDENCE OF BRONZE AND SILVER MEDALS

According to the GCU/Sustainability website on June the 12th 2009 Glasgow Caledonian University received a bronze medal. It was presented by the eco campus Director, Dr Peter Redfern of Nottingham Trent University to Jim McQueen who received it on behalf of Glasgow Caledonian University eco campus team during workshop number 5 at Bournemouth University on the 1st of July 2009. It was on a time scale of 2 and 3 month and it covered the “planning stage”. It had an upfront cost of ?9000 for purchase of training tools. These tools are: – web trainer tool, review tool, significance calculator tool and document control tool.

The silver medal was later awarded on the 28th of April 2010 after successfully completing the “implementation stage”. The certificate was presented to Therese Fraser and Jim McQueen on May the 18th 2010 at Nottingham Trent University in correspondence to their Workshop 9 attendance. This was undoughtedly accomplished based on the commitments the staff and students of GCU had put in. Presently, the institution focuses on programmes to reduce carbon dioxide emissions under the supervision of the university in areas such as administrative, accommodation, and leisure buildings. It also has in place a carbon management plan which was approved by the carbon trust on 30th April 2010. (gcu.ac.uk/sustainability).

As part of their commitment towards creating a sustainable and carbon free campus, GCU has joined the carbon trust scheme in addition to the eco campus plan. Besides that, their commitment goes as far as reducing their adverse impacts on the environment under the mandate set up by the Scottish government which involves an action to reduce carbon dioxide emission and to the climate change Bill 2007, commitments has been made to reduce emissions nationally by 69% by 2050. The School is also committed to promote projects which enhance society’s management of waste through collaborating with an environmental body that utilizes landfill tax credits called SCORE. (gcu.ac.uk/sustainability).

In terms of drafting an environmental policy under the bronze criteria GCU have been active in that department, a lot have been drafted but just to mention a few. The policies include:

Incorporate recycling initiatives within our waste management review, increase recycling by 5% year on year.
Develop the use of recycled materials and increase recycling initiatives.
Prevent pollution by reducing emissions and discharges.
Reduce the negative impacts associated with our travel by 4% in this year while developing partnerships with travel groups.
Reduction in water by 10% over the next 2 years by increasing automatic metering.

As mentioned in the policy document, it is underpinned by the values of the University and is subject to annual review by the Executive Board which is also another criteria for award attainment (environmental reviews) together with “implementation” of these plans which is the silver stage. The university achieved this through its collaborative effort between the EMS manager and certain specialists in each area of GCU. They reviewed aspects like electricity which has severe negative impacts especially as it is produced by burning fossil fuels. (gcu.ac.uk/sustainability).

Regarding the issue of awareness, trainings & workshops, GCU has achieved a lot in that area quite a number of awareness weeks & trainings have taken place like its carbon footprint programme that was held on Environment day May the 5th. Other awareness campaigns followed such as facilities management department held an Environmental & Energy awareness day on Thursday November 1st 2007. Amongst them the most successful one that took place was the Energy awareness day of September the 19th 2006. It was estimated that over 1,000 staffs and students passed through the exhibition.

5.0 STEPS TO ACHIEVE THE GOLD MEDAL

The Gold phase of the eco campus covers “operating” as mentioned earlier and is depended upon the institutions commitment. Operating consists of the following:-

– Resources, roles, responsibilities and authority;

– Competence, training and awareness

– Communication

– Documentation

– Control of documents

– Operational control

– Emergency preparedness and response. (eco campus Audit criteria 2005-2008)

1. Resources, Roles and Responsibilities

The university will have to provide evidence of appropriate resources put in place in order to implement the environmental management system. Roles and responsibilities should be allocated to member staffs and students; this will enable the institution to finalise the outline management structure.

2. Competence and Training

All training records shall be collated, recorded and stored. Assessment shall also be made on the competency of persons whose work may have a significant impact on the environment. Both staff and students especially those that are part of the eco campus team should have adequate training to ensure they understand the environmental issues relating to the institution and their roles and responsibilities for implementing the environmental management system. The same Training should also be done to any new persons joining the team and all training should be recorded and updated.

3. Communication

Procedures must be adopted for documenting and responding to environmental communication received from within and outside the institution. This can be achieved through presentations, briefings, lectures etc and key environmental impacts and relevant legal issues should be communicated to team members. Also, roles and responsibilities should be communicated to all relevant persons in order to meet the commitments made in the environmental policy and objectives and targets

4. Documentation/Control of documents

The institution shall develop an EMS manual describing how the EMS operates and cross referencing to relevant documentation. A procedure for controlling environmental management system documentation shall be established. This entails -documents shall be defined.

i- An authorised person shall approve system document prior to release and the date of approval shall be shown on the document.

ii-Record of changes made to documents shall be maintained.

iii- Responsibilities, authorities and processes for disposing of absolute documents shall be defined.

iv- An authorised person shall approve system document prior to release and the date of approval shall be shown on the document.

5. Operational Control

Having control over all operational activities is a vital role in achieving the Gold medal. This can be made possible by looking at the guide as follows:-

A procedure should be developed to outline the management of operational control procedures; procedures that address significant aspects in line with objectives and targets should be developed. These procedures shall demonstrate how the institution controls those areas of its activities which could have an effect on the environment.

6. Emergency Preparedness and Response

System to identify and respond to emergencies which could result in damage to the environment must be put in place. A schedule of emergency procedure test drill should be established, this will help to describe how the institution review and test emergency preparedness and response.

Glasgow Caledonian University through some of its activities like being part of the carbon trust and the commitments to sustainability and creation of greener campus has already tackled some of the basic elements listed above. However, there is still more to be done to ensure the institution becomes a sustainable institution. Some key issues like waste management and creating awareness through campaigns still needs to be addressed. Most students are either not aware or refuse to comply with the waste management strategy. There seem to be a waste segregation and recycling that is going on but due to lack of awareness most of students do not know therefore, there is still much that has to be done in order to attain the Gold level and achieve a sustainable university. And a target for that should be the international students which GCU has quite a few, source segregation for example needs to be made aware especially during the first weeks of orientation about how it works and its importance. Water management and electricity consumption is another issue that needs to be addressed, motion light sensors and water meters should be installed in hostels because that is where most of the consumption takes place. Students should be enlightened on the impacts of such actions and the need to develop a secure, safe and sustainable institution for learning. I also recommend placing parking ticket fee or stamps to parking spaces this will help reduce emissions from staff and students from coming with cars and at the same time make subsidies and promos on bus fares to school.

6.0 CONCLUSION:

All institutional activities have an impact on the environment and there is need to review our mannerisms if we are committed in reducing the effects. This can best be achieved through the incorporation of an environmental management system which appears to be the most logical and effective way. The success of the systems without a dought takes a little while to be actualized but there are a lot of gains attached to it, such as the Eco campus award schemes, National Recognitions, an efficient structured management system and above all the Management of our Environment. And again the success as mentioned in the report requires the devotion of the People within the organisation. So it is about time Government Steps in and make EMS a more Standardize requirement for organizations especially schools where most of the daily activities occur in terms of resources usage.

7.0 REFERENCES:
Caledonian Environmental Centre (CEC): 2007; implementing an environmental management system in Glasgow Caledonian University
Coglianese, C. Nash J.2001. Regulating from the Inside team can Environmental Management system Achieve Policy Goals Washington: Resources for the future Press.
Darnall, N. Henriques,I. Sardosky, P.2008. Do Environmental Management systems Improve business Performance In an International SettingJournal on International Management, 2008, 14, pp364-376
Eco campus Audit criteria 2005- 2008; Available on blackboard via health and safety assignment materials
Ecocampus. (2010). Ecocampus [Online]Available at: http://www.ecocampus.co.uk/EMS.htm[ Accessed on 4 November 2010]
GCU.(2010). Sustainability[Online] Available at : http// www.gcu.ac.uk/sustainability/susprochtml.[accessed 3 November 2010]
Hillary, R. (1999). Evaluation of Study Reports on the Barriers, Opportunities and Drivers for Small and Medium Sized Enterprises in the Adoption of EMSs. London: Network for Environmental Management and Auditing. Paper submitted to UK Government. Department of Trade and Industry: Environment Directorate (5/10/99).
Institute Of Environmental Management & Assessment.[Online] Available on http://www.iema.net.[Accessed 3 November 2010].
Shireman W. 2003. A Measurement Guide to Productivity: 50 Powerful Tools to Grow your Triple Bottom Line. Asian Productivity Organization: Tokyo

Categories
Free Essays

To assess the effects of current economic climate on various economies regarding HR management practices within the sample.

Abstract:

This research study involves a desconstructive approach to one of the most remarkable highlights of New Media Digital Media, which has been none other than the phenomenal growth of social networks which have definitely become the most domineering and conclusive communication tools of the modern society. Business and industry have taken full advantage of this innovation to incorporate personal and community profiles information sharing as effective human resource management and recruitment practice. Corporate businesses use of potential employee information for recruitment campaigns and subsequent monitoring and sharing of existing employee behaviour and character information. That has resulted in a whole host of sociology understanding or ethical/moral and legal issues within the topic of Business Management. The methodology of approach used within the research will consist of an ethnography study in a deconstructive manner to investigate the social behaviour adapted in various business environments through a constructivism (epistemology). This will essentially help to understand the sociological behavior of employees and employer engagement, when the implantation of social networks within business and HR between their own experiences and ideas about the subject matter through legal and ethical entities on data protection and corporate law. The research studies main objective is to investigate a niche criteria through a sociological observation on the legal ramifications involved and how organizations are dealing with the matter of mixing business with pleasure, when social networking strategies are implemented. In addition to investigate the main motive of unraveling a riddle that is currently a domineering topic of discussion among the business and human resource world. The outcome of a sociological observation will surface whether there exists any real evidence of increased business organizational productivity or is it just a mere misconception?

Introduction & Justification:

This research study involves a deconstructive approach to one of the most remarkable highlights of New Media Digital Media, which has been none other than the phenomenal growth of digital social networks which have definitely become the most domineering and conclusive communication tools of the modern society. Business and industry have taken full advantage of this innovation to incorporate personal and community profiles information sharing as effective human resource management and recruitment practice. Corporate businesses use of potential employee information for recruitment campaigns and subsequent monitoring/ sharing of existing employee behaviour and character information. That has resulted in a whole host of sociology understanding or ethical/moral and legal issues within the topic of Business Management.

Problem Description:

The massive growth of new media in the recent years and the popularity of digital social networks within business recruitment concept and strategies, there are bound to be corporate interests to radicalise human resource management and recruitment by incorporating social networks as business practice. Currently there is a lot of research available for a general business point of view. Not many researchers have involved the representation of understanding this movement from a sociology perspective.

There is not enough observational understanding about this corporate practice, when and how this practice was introduced within business management. What are the ratios and proportions of this human resource management practice and the factors attributable to the current financial crisisWhat are the effects of this practice on businesses and employees within local business cultures, ethical/moral codes and legal frameworksThis research intends to introduce the sociological communication of the business society in employee and employer engagement within the business environment in terms of legal or business growth production. This research intends to bridge this information gap.

Research Questions:

1. To what extent has the incorporation of social networks in corporate human resource management affected businesses and employees?

2. To what extent have business environments benefited from this practice in various economies under the current economic climate in the form of Business Growth and Productivity?

3. What is the main kind of concept and strategy imploded for using social networks as an E-Tool for corporate recruitment?

4. To what extent have various conflicts surfaced between employer and employee engagement on a social level within offices?

5. To what extent has the universal policies and privacies of one social network impacted upon business policies and terms in the form of culture, race religion and offices operating in different countries for the same organisation?

6. What kind of ethical/moral and legal issues has arisen directly as a result of this new development within business recruitment practices?

RESEACH AIMS & OBJECTIVES

1. To research and investigate a resource management sample using digital social networks within everyday business environment.

2. To assess the effects of current economic climate on various economies regarding HR management practices within the sample.

3. To identify and analyse the ethical/moral issues generated by human resource management practices within the sample company.

4. To ascertain and understand the cultural/social among employee/employer regarding the use of digital social networks for human resource management within the sample.

5. To highlight the legal issues regarding the rules and regulations of digital social networks incorporated within human resource management and the local laws to that effect within the sample.

SIGNIFICANCE AND SCOPE OF STUDY

The findings of this study will bring about the awareness, information and understanding of personal/community information sharing and monitoring as conceived by HR management and recruitment practices and associated aspects of various social, cultural, ethical/moral and legal issues within the sample countries. The knowledge attributed to this research will be very useful in formulating new rules and regulations regarding data protection, human rights, civil liberties and employment laws locally and globally. This knowledge will also be of imperative importance for future development of digital social networks policies, agreements/licensing and rules/regulations for their users.

Methodology:

The methodology of approach used within the research will consist of an ethnography study in a deconstructive manner to investigate the social behaviour adapted in various business environments through a constructivism (epistemology). This will essentially help to understand the sociological behaviour of employees and employer engagement, when the implantation of social networks within business and HR between their own experiences and ideas about the subject matter through legal and ethical entities on data protection and corporate law. The research studies main objective is to investigate a niche criteria through a sociological observation on the legal ramifications involved and how organizations are dealing with the matter of mixing business with pleasure, when social networking strategies are implemented. The outcome of a sociological observation will surface whether there exists any real evidence of increased business organizational productivity or is it just a mere misconception?

Discussion Arguments:

The reason for adapting an Ethnography methodology for this PhD study provides an obvious rational. Ethnography methodology is used with certain academic disciplines especially Social Sciences. Ethnographic research comes from the discipline of social and cultural anthropology where an ethnographer is required to spend a significant amount of time in the field. Ethnographers immerse themselves in the lives of the people they study and seek to place the phenomena studied in their social and cultural context Ethnographic research comes from the discipline of social and cultural anthropology where an ethnographer is required to spend a significant amount of time in the field (Lewis, 1985: p. 380).

My research topic is a clear indication of requiring an Ethnographic research as it is investigating the social context of business organisations cultural anthropology. As I will be observing how employees and employers engage with social network during a business working environment to conduction a sociological observation.

After early ground-breaking work by Wynn (1979), Suchman (1987) and Zuboff (1988), ethnography has now become more widely used in the study of information systems in organizations, from the study of the development of information systems (Orlikowski, 1991) to the study of aspects of information technology management (Davies, 1991; Davies & Nielsen, 1992). Ethnography has also been discussed as a method whereby multiple perspectives can be incorporated in systems design (Holzblatt & Beyer, 1993) and as a general approach to the wide range of possible studies relating to the investigation of information systems (Pettigrew, 1985).

Ethnography is a research strategy that focuses upon describing and interpreting the social world through first-hand field study. The purpose of ethnography is to describe and explain the social world the research subjects inhabit in the way on which they describe and explain it. Although not a dominant research strategy in business, ethnography is very appropriate if the researcher wishes to gain insights about a particular context and better understand and interpret it from the perspective of those involved (Saunders et al., 2007). Researchers into management and organisations become ethnographers by working for a time in the business and the organisations they study and as a result, they become participant observers (Fisher, 2007). In participant observation the researcher attempts to participate fully in the lives and activities of subjects under study in order to understand the meaning and significances that people put upon the behaviour of them and others (Wisker, 2001). We will adopt the role of ‘’participant as observer” which means that our identity as researchers would be clear to all concerned and the subjects will be aware of the fact that this is a field study (Saunders et al., 2007). This will enable us to enter in the setting, in this case in a service QC, become part of the group and capture what people actually do, rather than what they say they do. Our objective is to fully involve and take part in order to see what people are doing, and why and this will enable the registration of experiences and behaviours at first hand in a detailed way, from the “inside” (Evered & Reis-Luis, 1981). In addition, adopting this role allows the data to be gathered in a way that we are not covert and we will be benefited by determining from the members of the circle “what the problem really is”. Taking the time and effort to listen to the people doing the job can lead to valuable insight and deep understanding of the situation and their attitude towards QCs. It is our opinion that this methodology can provide us with all the appropriate qualitative information and data in order to investigate QCs in an efficient way. Finally, the semi- structured interviews will provide us with further detailed information and will supplement the data gathered by the observation. Members of QCs as well as facilitators will be interviewed in order to describe their experience as members and it will give us the opportunity to examine their personal views about the concept and purpose of QCs. Moreover, interviews will provide us feedback in order to compare our understanding and analysis of the situation with the views of members, since the conclusions of our observation will be discussed.

Bibliography:

Myers, Michael D. (1999) “Investigating Information Systems with Ethnographic Research,” Communications of the Association for Information Systems: Vol. 2, Article 23.
Available at: http://aisel.aisnet.org/cais/vol2/iss1/23

Wynn, E. (1979), “Office conversation as an information medium”, Unpublished PhD thesis,

Universityof California, Berkeley, CA.

Lewis,I.M. (1985) Social Anthropology in Perspective.Cambridge:CambridgeUniversityPress.

Suchman, L. (1987), Plans and Situated Actions: The Problem of Human-Machine Communication,

CambridgeUniversityPress,Cambridge.

Holzblatt, K. and Beyer, H. (1993), “Making customer-centered design work for teams”,

Communications of the ACM, Vol. 36 No. 10, pp. 93-103.

Orlikowski, W.J. (1991), “Integrated information environment or matrix of controlThe

contradictory implications of information technology”, Accounting, Management and

Information Technologies, Vol. 1 No. 1, pp. 9-42.

Davies, L.J. (1991), “Researching the organisational culture contexts of information systems

strategy”, in Nissen, H.E., Klein, H.K. and Hirschheim, R. (Eds), Information Systems Research

in the 1990s, Elsevier/NorthHolland,Amsterdam.

Davies, L.J. and Nielsen, S. (1992), “An ethnographic study of configuration management and

documentation practices in an information technology centre”, inKendall, K.E., Lyytinen, K.

and De Gross, J. (Eds), The Impact of Computer-supported Technology on Information Systems

Development, Elsevier/NorthHolland,Amsterdam.

Pettigrew, A.M. (1985), “Contextualist research and the study of organizational change

processes”, in Mumford, E., Hirschheim, R., Fitzgerald, G. and Wood-Harper, A.T. (Eds),

Research Methods in Informations, North Holland, Amsterdam, pp. 53-78.

Categories
Free Essays

Risk and Safety Management

INTRODUCTION

The idea of occupational health and management systems is rather complex and several definitions exist. The debate about OSHMSs is evident that there is no universal knowledge of the concept of occupational health and safety management. Rather there exist many models and approaches which are frequently merely sub elements regarded as complete management systems. Although the fundamental objective is to improve the health and safety of employees, at a more indebt level, one can find a variety, for example by using prevention as a fundamental company objective, by projecting the employer’s responsibility or by improving the employees’ participation and their representatives.

Occupational Health and Safety management system can be defined as a set of harmonized and incorporated processes, that allows a business or organisation to be able to control and manage their occupational health and safety issues in a homogeneous, orderly and effective way. It also enables organisations to comply with the requirements of legislation and also to initiate current best practice. Because it uses a systems approach, it helps guarantee’s a reliable and systematic approach to health and safety management throughout an organisation.

Implementing this type of system is an indication that an organisation is taking a coordinated approach to the prevention of occupational health and safety risks. It is a choice that explicitly sets out to:

– Improve an institutions responsiveness and performance in OSH

– purge or reduce health and safety failures

– predict change

– Ensure overall uniformity with other management policies

– Contribute to improving the Company’s image.

H&S MANAGEMENT SYSTEM MODELS

There are two recommended approaches depending on the organisational needs of the business and with the objective that the approach will be integrated into the total management system. One is based on successful health and safety management HS (G) 65. Another model is OHSAS 18001, the international standard for health and safety management systems. The international standard recognises HS (G) 65 and uses essentially identical principles. Both models are very similar with some minor differences.

Effective health and safety management systems should have clear processes to follow, such as clear directives that describes who does what and when. Effective health and safety management systems should also have Control Forms in place that are used to control the important steps in the process. These should be simple, clear and easy to use as they will, when concluded, records that are necessary for the continues effectiveness of the management system.

Some of the basic components of an effective management system are thus:

1) developing a sound policy,

2)organising,

3) developing procedures,

4) monitoring performance and

5) Reviewing the effectiveness of the management system.

The various models of management systems standards are in effect establish on the same values of management as those of general management. Management systems based on OHSAS 18001, AS 4801-2000 and ISO 14001 are prescriptive than others that are base on HSG65 and, to a great extent, ILO-OSH 2001, which base greater concern to the responsibility of people in the management of occupational health and safety risks.

RESERACH EVIDENCE OF THE EFFECTIVENESS OF H&S MANAGEMENT SYSTEM

Some research has been carried out to assess the effectiveness of Occupational health and safety management systems. Frick et al. (2000:2) pointed out that the lack of critical assessment is astonishing despite the fact that:

‘OHSM has evolved internationally as the major strategy to reduce the serious social and economic problem of ill-health at work’.

On the other hand, there are some researches that base their findings on the effectiveness of OHSMS, and which will be grouped as the ‘effectiveness research’.

The first (effectiveness research) is a project started in the late 1970s, by researchers at the National Institute of Occupational Safety and Health (NIOSH) in the USA to look at the different characteristics of companies with outstanding health and safety performance. In the first two stages of the research, matched pair comparisons were undertaken of safety programme practices in companies with high and low injury rates (Cohen et al., 1975; Smith et al., 1978). The third stage of the research looked at the health and safety programmes of five companies with commendable health and safety performance (Cohen & Cleveland, 1983).

Some sensitive issues were identified in the NIOSH research and other research linking the practise of health and safety management with injury result data (Simonds & Shafai-Sahrai, 1977; Viner et al., 1989; Gallagher, 1994; Zohar, 1980; Chew, 1988; Shannon et al., 1996; Simard & Marchand, 1995; Eyssen et al., 1980). Research findings of the studies suggest the fundamental and critical role played by senior management employees (managers) in successful health and safety management systems, the role of effective communication, employee participation and consultation in the whole process.

Another research conducted in the nuclear industry have identified further conditions for the effectiveness of health and safety management systems. Marcus’ (1988:251) research of externally induced health and safety innovations in nuclear power companies following an incident (Three Mile Island incident) found autonomy to be a fundamental factor for the effectiveness of Health and safety management system. Nichols and Marcus (1990) in their research emphasize the eventual negative impact of the lack of management attention from vital production and safety requirements. There are some factors that stand against the adoption of effective health and safety management systems. These include:

-the difficulties faced by small firms,

-subcontracting arrangements, and

-contemporary labour market changes.

Research conducted in Australia by Gallagher (2000) was based on the relationship between OHS type and system performance. This is the only major empirical research of health and safety management system effectiveness in Australian industry. Research evidence was collected in the mid 1990s from some twenty organisations that had implemented an occupational health and management systems. The systems in these organisations were grouped according to Gallagher’s cross typology based on management structure/style and control strategy. Performance was then evaluated using three criteria

– Incident/claims trends,

-changes in performance relative to industry benchmarks, and

– An assessment through an audit tool based upon Safety MAP.

The research findings suggest the type of occupational health and safety management system may influence its effectiveness or failure. There was a tendency for innovative/safe place enterprises (adaptive hazard managers) to perform better than traditional/safe person enterprises (unsafe act minimisers). Adaptive hazard managers stand out from the remainder by the vigour of their focus on elimination of hazard as the underlying purpose of their system activity. They had an organised approach to the management of hazard for the full spectrum of hazards, in contrast to other cases where systems activity variously had an underlying risk management or cultural change purpose, or appeared to be base at improving the health and safety system as an end in itself. Gallagher’s findings strengthen the results of the various ‘effectiveness’ research that highlight the important role played by top managers and of employee participation and engagement

‘’That the most senior managers should drive health and safety change and that health and safety representatives should move away from the margins of health and safety management, into more mainstream health and safety management planning, implementation and review.’’

In his analysis of the Esso gas plant disaster, Hopkins’ (2000) provides a thorough case study of how lack of management commitment can cause a system to fail in practice. Esso had its own occupational health and safety management in place called Operational Integrity Management System (OIMS), once complemented by many as an ideal system and one which company audits suggested was operating at peak level. Reviewing material from the Longford Royal Commission, Hopkins identifies a number of failures in the Esso system that directly contributed to the disaster:

1) Defective auditing processes,

2) Failure to adequately identify hazards and assess risks,

3) A hands-off management strategy,

4) Absence of procedures to deal with the immediate set of incidents,

5) Inadequate training,

6) Poor communication mechanisms

7) Inadequate hazard reporting system.

All the above can in a sense be seen as some of the barriers to the effectiveness of an occupational health and safety management system. Hopkins (2000:147) on the other hand challenges the critics of Occupational health and safety management systems who argue that the Esso disaster discredits the idea of an OHS management system and points instead to the need for ‘organisational mindfulness’, an idea said to account for the reliability of high reliability organisations. Hopkins suggests that mindfulness can strengthen an OHSMS by highlighting the aspects of health and safety management that are essential for high reliability.

A further research by Dell (2000) was out to identify the conditions of an effective OHSMS and the needed interventions to ensure the systems characteristics are well understood and applicable to industry. Dell draws the differences between proactive and reactive systems, the later marked by reactive activity following an incident; the former by proactive hazard management linked to quality and continuous improvement philosophy. Of the fifteen companies assessed, more than half have no management focus on health and safety and high levels of legislative non-compliance and no fundamental system in place. Of the remaining companies with some sort of system in place, the systems are mainly reactive in nature with no indication of proactive logical hazard or risk management activity. System performance remains difficult to separate given these sub-optimal conditions.

BARRIERS TO THE EFFECTIVENESS OF H&S MANAGEMENT SYSTEM

The evidence from research suggests that Occupational Health and Safety management systems are likely to fail because of the following reasons:

1).The inability to meet primary conditions for Occupational health and management systems effectiveness (by not customising systems to organisational needs, imposition without consultation, relax top management commitment and non-employee involvement).

2).The inapt utilisation of audit tools (where they become an end in themselves, are base on misdirected management goals, and are conducted without any expert auditor skills, standards and criteria).

3). Application of the system in hostile contexts (small business, precarious employment, contractors and labour hire companies).

CASE STUDY OF MY EXPERIENCE IN THE EFFECTIVENESS OF H&S MANAGEMENT SYSTEM

These case studies are base on my experience on a review which was undertaken by ASHMAN & ASSOCIATES LTD CAMEROON between 2001 and 2009. These studies include:

1) A review of occupational health and safety management systems used within the Cameroonian chicken processing industry.

2) An evaluation of injury prevention within a large governmental department with multiple locations across Cameroon.

3) The development of a strategic plan for injury prevention within a large governmental departmental involved in the running of detention centres.

4)The approach towards injury prevention with the Douala reference hospital

5) A manufacturing company involved with the making and distribution of textiles.

Each of these case studies involved an objective of assessing the effectiveness of the occupational health and safety systems for developing an injury prevention model suitable for the culture and hazards associated with the respective workplaces. Each project primarily involved the following methodology:

1) A review of the workplace’s injury history for the previous three to six years and identification of the primary types of injuries as well as their location and causal agents.

2) A review of incident reports and safety committee minutes, as well as consultation with key stakeholders in identifying the variety of hazards that is evident within the respective workplace.

3) A series of walk-through inspections and audits of targeted areas within the workplaces.

4) Technical assessments based on a risk management approach for identifying hazards, with assessing based on legislative and best practice models, and development of appropriate risk controls.

5) Maintaining consultation with the stakeholders throughout the risk assessment approach and monitoring the adoption and evaluation of recommendations.

6) Integrating the results of the risk assessments into a range of appropriate business plans relevant for the size and scope of issues managed in the business.

7) Debriefing the senior management of the organisation on the major findings and recommendations.

8) Developing key performance indicators, in consultation with the stakeholder groups, to ensure an approach of ongoing implementation and continuous improvement with respect to addressing injury prevention in the workplace.

RESULTS OF EXPERIENCE

On the basis of the research conducted in these workplaces, a range of business imperatives were clearly identified within those companies which were successful in addressing occupational health risks. The key imperatives were as follows:

1) Management commitment and active participation

2) Participation of the employees

3) Setting of goals and measuring performance

4) Integration of Occupational health and safety strategies into business plan

5) Positive feedback and recognition of achievements.

The commitment of senior management and their participation in the prevention systems was vital. The direct involvement and commitment of the senior management was the major determinant within specific workplaces as to the level of improvement and sustained performance in injury management. Without their commitment and participation, the prevention appeared to achieve a ‘glass ceiling’ above which the performance appeared not to improve. This was particularly evident where responsibility for OHS management was delegated to a ‘middle level’ manager, in particular those with non-operational responsibilities, such as human resource managers or OHS officers.

The successful integration of OHS with other management systems will ensure that the long term objectives of the organisation incorporate a desire to develop OHS initiatives through each stage of the design and development process.

It is evident from these case studies that the five basic imperatives outlined should be key components of a system which will produce a sustained focus on injury prevention. Many of the OHS management systems available on the market were found to be too complex and too time consuming and costly to implement and maintain for the majority of the businesses assessed. However, the requirement of at least a simple system which contains these key imperatives would seem a sensible starting place for organisations contemplating a programme focusing on injury prevention at the workplace level.

CONCLUSION

Implicit in many of the research reviewed above to show the effectiveness of Occupational Health and Safety management system is the finding that OHSMS sometimes work under the appropriate conditions. It also alludes to the significant importance of top management commitment and employee involvement in the whole process. A general agreement also emerged that the effectiveness of Occupational health and safety management systems depends on concrete top management commitment and employee involment which were relentlessly described as essential and inter-linked. Top management commitment is regarded as a pre-requisite for embarking on a systems approach in the first place. Without this whole concept of top management commitment, an OHS management system cannot be effective or is likely to collapse into a token exercise. Employee consultation and Involvement was also considered equally important to its effectiveness.

REFERENCES

Cohen, A., Smith, B., & Cohen, A. (1975) Safety Program Practices in High vs. Low

Accident Rate Companies – An Interim Report, National Institute of Occupational

Safety and Health, Publication No 75-185, Cincinatti.

Cohen, H., & Cleveland, R. (1983) Safety Program Practices in Record-Holding Plants, Professional Safety, March, 26-32.

Dell, G. (2000) Current Safety Management Practice: Does a Systematic Approach

DeliverPaper presented at the First National Conference on Occupational Health

and Safety Management Systems, UWS, Sydney.

K. Frick & P. Jensen & M. Quinlan & T. Wilthagen (Eds.) Systematic OHS Management: Perspectives on an International Development, Elsevier, Amsterdam.

Gallagher, C. (1997) Health and Safety Management Systems: An Analysis of System Types and Effectiveness, National Key Centre in Industrial Relations, Monash University, Melbourne

Gunningham, N., & Johnstone, R. (1999) Regulating Workplace Safety: System and

Sanctions, Oxford University Press, Oxford.

Health and Safety Executive (1991) Successful Health and Safety Management, HMSO, London.

Hopkins, A. (2000) Lessons from Longford: The Esso Gas Plant Explosion, CCH Australia Limited, Sydney.

Categories
Free Essays

IHRM Policies and Practices: Global Talent Management and Development

INTRODUCTION:

Talent as described by the Oxford English Dictionary is among other things, (i) ‘a natural aptitude or skill’’ (ii) ‘people possessing such aptitude or skill’’.

Talent management is the systematic attraction, identification, development, engagement/retention and deployment of employees with high potential who are of value to an organisation (CIPD/HR INFORM: (2011) Talent Management)

One of the principal goals of the Human Resource Management unit of any organisation will be the effective management of the talents embodied in the personnel of the organisation. In fact, the success and effectiveness of the Human Resource Management Policy of an organisation can be measured by its success in this core sector amongst others. This is driven by the simple truth that “people make the organisation”. Consequently, the “right” people with the right skills and orientation will drive progress and growth in the organisation while the “wrong” people may lead to collapse.

With the advent of globalisation, a phenomenon that has integrated formerly independent and distinct national societies and economies, including the various organisations operating in them, across the world through trade and technology. Globalization means liberalization and global integration of markets, it is primarily an economic phenomenon; It is inevitable and benefits everyone, as it spreads progress and democracy throughout the world (Steger (2005) and Fairclough (2006)).

Despite the obvious advantages of global integration such as a wider market reach and larger talent pools to pick from, the fact remains that societies, norms, values and business principles vary widely from region to region.

A good example of this difference can be seen in the advertising campaign launched in 2002 by the international banking group HSBC as a result of a worldwide customer survey.

One of the adverts include a set of three different numbers, each considered to be unlucky in three different countries; 888 is an unlucky number in China, 4 is an unlucky number in Japan while 13 is an unlucky number in the United Kingdom. While readers living in the United Kingdom may be familiar with the number 13 being an unlucky number, it is assumed few people will know that 4 and 888 are also considered unlucky in some other countries.

(http://www.hsbc.com/1/2/newsroom/news/2002/new-campaign-for-the-worlds-local-bank)

Although Human Resource Management may be at different stages of development in different countries, there is a gradual shift towards convergence- at least across developed nations. This happens for a variety of reasons but principally because it is assumed there is ‘one best way’ of managing Human Resourses and its associated practices, such as job design, work organisation and quality control which is permeating throughout the developed world (Marchington and Wilkinson, 2006, p.26).

Managing people globally is an increasing challenge for Human Resource practitioners. Research conducted by the CIPD (Chartered Institute of Personnel Development) in 2009 with 4,000 HR professionals indicates that 30% of respondents see themselves as having international responsibilities (CIPD Research international membership Internal , 2009). Eighty-seven per cent said that ‘keeping up with global developments’ is important to them. This suggests that even if an individual’s role is focused in one country, they cannot ignore the wider world of global Human Resource Management.

The challenge for Human Resource Management operating globally is to understand varied markets for both products and people. To assess this global talent challenge we need to understand the drivers of learning and talent development in all of the countries we seek to operate in and from. This has implications for firms competing globally, those with operations abroad and those seeking to exploit these alluring but difficult new markets. In addition, much of our domestic skills debate in the UK is fuelled by a preoccupation with the skills the UK needs to develop to compete with these emerging nations. Much of the hype about emerging economies omits the talent, culture and human capital dimension, which is crucial to really understanding how business operates.

This article aims at identifying the current differences in policies and practices across the world, the various options being employed to remove these differences as well as to critically evaluate the changing landscape of Global Talent Management and Development.

TALENT MANAGEMENT AND DEVELOPMENT ACROSS THE WORLD

Each country or region faces a unique context in managing and developing talent. The factors that shape each country’s context are wide ranging and may include government laws, market forces such as supply and demand, geography, religious and ideological belief systems, level of technological advancement etc. In the following paragraphs, snapshots talent management practises in selected countries and regions will be examined.

THE WEST (EUROPE AND AMERICA)

Western countries have always been at the forefront development in Human Resource Management. Over the years, there has been a gradual evolution in the European Talent Management and Development system fuelled by the understanding that the right skills must be identified and cultivated to maintain an organisations’s competitiveness and to drive growth and development in the organisation.

One of the new pioneering moves of managing talent is that organisations are now tending towards taking ownership of the training programs for their staff. This gives the advantage of having training programs developed to match the specific needs of the organizations. They also go further to partner with various government institutions to ensure these programs meet the relevant academic standards of the country. For instance, it was revealed in the magazine of the Chartered Institute of Personnel And Management (CIPD 27 January 2011) that the supermarket chain Sainsbury’s has put in place a strategy for developing talent to match its business expansion ambitions. As part of this strategy, it has been recently announced that six food colleges will be created. As many as 10,000 staff, more than 6 percent of the workforce, will attend the colleges each year to train and improve skills ranging from knife handling to customer service.

Another phenomenon related to that discussed in the preceding paragraph is the development of industry-wide as well as globally-accepted standardised training and examination techniques which result in the award of internationally-recognised professional certification by leading organisations. This hugely successful initiative has fast-tracked the development of large numbers of professionals to take up many vacant job places especially in the Information technology industry. Examples of such programs include the Microsoft Certified Professional (MCP) by the software company Microsoft. Other companies running a similar program include CISCO and Oracle,

Learning and development teams within the Human Resource management departments of organisations have been the standard driving force for training and development of personnel. They are usually taxed with the burden of identifying training needs and organising how these needs are met. They still have very important roles to play in talent management especially in smaller organisations where the cost-effectiveness of specialist talent management resources may not be justifiable.

A move by large organisations in Europe is the establishment of dedicated “Skillpool Management and Succession Management” planning teams within the wider Human Resource Management Team.

Succession Planning according to an article in People Management magazine of the CIPD is; “a process by which one or more successors are identified for key posts (or groups of similar key posts), and career moves and/or development activities are planned for these successors”.

The business case for succession planning is very sound considering the fact that it is very difficult to get people of the right skills especially at top management or specialist functions in the organisation. The cost implication of contracting out the recruitment process or handling it in-house as the case may be can be substantial without any guarantees of success. Even when the recruitment process is successful, the new employee may require upwards of six months to start performing at full capacity. On the other hand, identified potential successors within the organisation already have most of the relevant business-related information and will require much less runup times in their new roles. Business-critical functions are also at risk if succession planning is not put in place. In the event of loss of staff in these roles for any reason, an organisation may easily be brought to its knees if a successor is not identified on time.

A good example of this situation is the case surrounding the founder and CEO of Apple – Steve Jobs who had been hospitalised repeatedly. Because a successor has not been formally identified, investor confidence in the company has been wavering with shareholders demanding a rectification of the situation.

The succession planning team will usually perform some of the following duties;

• identify the key roles that would require succession

identify all possible successors to these roles including both short and long term successors• develop succession plans by genuine engagement of all concerned parties.
• develop job (or job group) successors and development plans for individuals• analysis of the gaps/training needs revealed by the planning process and development of mechanisms to fill the gaps

• regular review of the process.

It is worth noting that the whole succession planning process has to be carried out as an intrinsic part of the HR policy of the organisation with full support of the organisation’s management.

Coaching and Mentoring is also an effective talent management technique applied in organisations across Europe. In this case, senior personnel pair up with younger colleagues and pass on their knowledge to them over time. This is a very effective tool and is used intrinsically in succession planning. For this to be effective however, it will need the support and commitment of both the mentor and the mentored.

Recruitment agencies and so called “head hunters” are also widely used across Europe to attract talented employees, often from rival organisations. As previously defined, talent management involves the identification, attraction as well as retention of suitably skilled personnel into an organisation.

INDIA

Due to the long-term economic and socio-political relationship between India and the West (especially the United Kingdom), India has absorbed some of the afore-mentioned talent management systems, at the same time other underlying cultural and socio-political issues cannot be ignored.

On one hand, elite talent of the type turned out by the top universities is highly attractive and highly mobile, with Indian engineers and specialists beating a well-trodden path to better prospects in areas such as the Gulf countries, the USA and Europe. Indian companies look increasingly to the global talent market to source key people from abroad. The other main challenge in India that is linked to talent is leadership development. For Indian companies and those with operations in India, the challenge is for managers who depend too much on technical skills to acquire the critical people skills that will make them effective leaders. Talent retention is a major issue in India because there are many opportunities for the cream of Indian employees to exploit (CIPD, Talent Development in The Bric Countries).

On the other hand, despite the popular notion of India being dominated by high-level IT skills, its talent pool is much patchier and there are major issues in developing the skills that expanding business requires. As a result, key talent is scarce and most HR activity is based on rapid recruitment. A talent-focused approach will help companies develop their business in the sub-continent. India has been one of the most dynamic high-growth economies. It’s easy, however, for the recurring picture of high-tech back-office functions, staffed by high-tech graduates, to be seen as typical of India. In fact, high-tech employment accounts for a small overall proportion of the service sector, which itself counts for about a quarter of employment. The sector includes employment in all areas of the service economy, from high-tech, low-cost airlines to the grinding bureaucracy of the Indian railways. These industries occupy the most qualified layer of people. More typical of India is agricultural employment, which constitutes 60% of employment, while manufacturing accounts for less than 15% of the workforce. Most of India’s 510 million labour force has poor levels of general education and there is widespread illiteracy. A minority of wealthy individuals have access to the best education at both secondary and university levels.

The rest of the ‘tertiary’ education sector has been assessed by the OECD as mediocre (OECD 2007). There is also a growing deficiency in soft/employability skills, with the focus on the technical skills India is renowned for in the public imagination. Most graduates have poor ‘non-technical’ skills, which impedes their effectiveness as workers and reduces their productivity (Rao and Varghese 2009). This also reduces the effectiveness

of management, especially when coupled with some of the cultural issues

The persistence of informal employment is also a barrier to productivity and growth. Indeed, a recent OECD report indicates that employment in firms of ten or more employees accounts for less than 4% of total employment, while formal structured employment of the type necessary to developing employee commitment and skills accounts for only 15% of total employment. According to Indian HR experts, India’s problem is not a labour shortage but a talent shortage (Rao and Varghese 2009). This talent shortage effectively drives up wages and exacerbates shortages in growth sectors. That is why the issues of managing talent, improving leadership development and managing work–life balance top the HR Agenda in India (CPA 2008).

CHINA

China faces talent problems from top to bottom. First, it faces a huge and ever expanding rural population drawn in from subsistence agriculture, which needs to be re-skilled to enter the nation’s factories. Many of these labourers are still put to work in primitive, low-productivity factories managed in a distinctly authoritarian manner. As a result, their skill and therefore productivity is impaired, and the value and quality of Chinese manufacturing suffers. As in India, labour costs are increasing because cheaper labour costs are offset by low productivity. Many of the workforce are not just unskilled but illiterate.

This trend is set to continue as many more move from the rural interior to the industrial east.

In the middle of the labour market things are more positive but, like the cliche of Bangalore in India, not all Chinese industry is manufacturing high-tech games and 3G phones. Skilled technicians, managers and sales people account for only 4% of the Chinese workforce, when the nation requires nearly a fifth to be equipped in these areas. Many Chinese people with technical skills, such as engineering, computing and the sciences, emigrate, and the country needs to import graduates in the key business skills such as accountancy, marketing and commerce. However, arguably, graduates are orientated too much towards the technical side of business and need to be grown and developed as managers and leaders (Yang and Wang 2009).

All nations have what management specialists refer to as ‘institutional factors’ in how people are managed. In China these issues loom large. State-owned enterprises are still beset by the residual suspicion of enterprise and individualism. The standard Western view of people as the most important asset is portrayed as callous and instrumental.

Conversely, in the private business sector, especially the home-grown factories, the perceived indulgence and inefficiency of communism is turned on its head with workers quite literally ‘sweated’. Many SMEs adopt a’ clan management ‘ style, often using harsh supervision that leaves little room for engagement, involvement and strategic people management practices.

To comply with international labour standards and a highly restrictive state employment regulations, many entrepreneurs set up ‘shadow’ factories, with one operation for inspection and audit and another for production. Often these have separate workforces which –though labour costs are low – is ultimately, unsustainable (Harney 2008).

BRIDGING THE GAP

How then can international organisations having business interests across some or all of these vastly different geographical and socio-political landscapes function effectively.

This is the million-dollar questions that International Human Resource professionals across the globe have been grappling with. The truth is that there is no easy answer and there are varied schools of thought on the issue.

Multinational companies have navigated these difficult terrains over the years, learning from mistakes and evolving with time.

Most countries have strict regulations with respect to employment of citizens and non-citizens and the first rule for any responsible corporate citizen will be to work within the legal framework of the host nation. However, employment is only the initial phase of the talent management portfolio with other phases such as deployment and career development requiring attention.

A thorny issue that also arise for Human Resource practitioners is that of diversity.

Step into any high-street bank, chain store or other customer-facing business and the chances are that the people who serve you will reflect all the rich diversity of 21st century Britain. But enter these same companies’ headquarters and take the lift up to their executive suites and you are likely to find yourself in a mid-20th century time warp. The people here will be overwhelmingly white, male, able-bodied and of a certain age – a photo of their wife and kids will doubtless be on their desk.

It isn’t so much that large organisations actively discriminate against people who don’t fall into this narrow category. A minority no doubt do discriminate, but prompted by legislation, skills shortages and demographic change, most employers are recruiting from an ever-widening base and take the diversity agenda seriously. The trouble is that there is often little joined-up thinking between activities that come under this agenda and what employers are doing to nurture top talent. As one HR director quoted in a recent report on the management of executive talent, put it: “Ideally talent and diversity should happen together but in reality we are terrible at it. On average, our senior managers are right-wing, white and middle-aged.”

According to Jonathan Smilansky, the author of the report, The Systematic Management of Executive Talent, diversity in this context is often seen as being about political correctness rather than something that can have an impact on the bottom line.

(CIPD: People Management Magazine 07/2005)

“The real turning point for a number of businesses is when they realise that if your managerial population does not reflect your client base, you can’t understand your consumers and therefore you can’t provide them with the kind of service that you want to,” says Smilansky, a partner in the executive assessment and development consultancy Hydrogen.

A representative employee base from top to bottom is essential for a company’s development and success and the challenge for Human Resource practitioners is to proactively identify and nurture diverse talents across board in every organisation. Organisations need to have proactive, concise, measurable and achievable mission goals for equal opportunities for all employees.

Another effective means of bridging the gap across countries in terms of talent development is the development of a uniform approach across the whole organisation. The organisation develops a standard company policy that guides the talent management practices across all its spheres of operation. Words of caution though, for this “policy” to be effective, it must take into account the various factors that operate in the individual nations and communities where the policy will be used. It may not be very successful if it attempts to enforce standards of one particular geo-political area onto other. Compromise may be the best way forward.

The concept of Cross-posting and work exchange is also a tool for bridging gaps across socio-political divides in organisations. The idea is that a worker recruited in the United Kingdom for example who has been identified as a potential for a position that would require familiarity with customs in Hong Kong is transferred to the Hong Kong branch of the organisation for a number of years so as to gain firsthand knowledge of the practices in Hong Kong to prepare him for the future position.

Cross posting within an organization is not only beneficial for preparing individuals for future roles but also helps integration within the organisation with employees gaining better insight into how other cultures and people work.

EMERGING TRENDS

From the foregoing, organisations have gradually moved towards various styles of managing global talent development. Intense competition and harsh economic climates have shaped this key aspect of human resource management in diverse ways. HRM practitioners are innovating and experimenting with new ideas on how to tackle growing talent shortages and have come up with various ideas. Below are critiques of some of these new trends:

Imported Talent:

Many organisations especially in Europe are now increasingly looking to sourcing workforce from eastern countries like China and India as well as African countries. They are ready source of cheap and reasonably equipped skill pool that organizations can tap into. The professionals themselves are willing to relocate to Europe on the promise of a better life.

This provides a solution to the issue of aging populations across Europe by supplying a ready working class to support the young as well as the old and retired.

Everybody wins except the countries where these expatriates are coming from who end up training a manpower pool for other countries without benefitting from the ideas and innovations of the people that they had invested so much in. The “brain drain” syndrome is a well-flogged issue.

On the other hand, there is the argument that these expatriates remit money back to their home countries to families and relatives left behind, running up to millions of pounds annually.

The better of these two rewards to the home countries of these professionals is left for the reader to decide; financial remittance or intellectual contribution to the building up of their home nations.

Offshore Jobs/Outsourcing:

Another radical approach to the international talent management conundrum is the outsourcing of total companies, production plants, departments or operations to other countries where talents are readily available and cheap, thus helping to bring down the overheads of organisations and improve profits. Typically, this outsourcing is from western nations to the east.

There are heated arguments for and against this idea. The argument in favour is obvious; lower operating costs and higher profits. The argument against takes a more holistic and long term look at the issue to arrive at the conclusion that moving jobs and talents to other nations will impoverish the local community/nation at the long run.

Head-Hunting:

This is a short-term solution to the talent deficiency problem. It usually involves poaching identified potentially beneficial personnel from other organisations with the lure of better compensation packages and or promotion. The advantage is that it promotes healthy competition amongst organisations in the area of compensation packages and salaries for employees. However, it does not address the underlying problem of inadequate number of qualified personnel in any given industry.

CONCLUSION

Global Talent management is a dynamic and critical aspect of Human Resource management and indeed the total management of the organisation. Organisations that ignore this fact do so at their own peril.

It is the opinion of this writer that in order for organisations to remain competitive both in the short and long term, they will have to develop and implement a Global Talent Management Policy that takes into account all aspects of their operations, the surrounding socio-cultural factors in the host countries where they operate as well as equal opportunities for all employees. It may not always be the most cost-effective approach in the short term, but investments made now will definitely yield positive long term results.

BIBLIOGRAPHY

CIPD (2011) People management Magazine,p.20, (27 January 2011)
CIPD/HR INFORM: (2011) Talent Management
CIPD (Chartered Institute of Personnel Development) 2009
CIPD: People Management Magazine 07/2005
CIPD, People Management Magazine(2011)Talent Development in The Bric Countries
CIPD Research international membership Internal , 2009
Fairclough, N. (2006) Language and Globalization. London and New York: Routledge.
HARNEY, A. (2008) The China price: the true cost of Chinese competitive advantage. London: Penguin Books.
Marchington and Wilkinson(2006) Human Resource Management at Work p.26
OECD Country and Labour Market Reports 2007, 2008, 2009 and PISA test

scores for similar years.

RAO, T.V. and VARGHESE, S. (2009) Trends and challenges of developing human capital in India. Human Resource Development International. Vol 12, No 1. pp15–34.
RAO, T.V. and VARGHESE, S. (2009) Trends and challenges of developing human capital in India. Human Resource Development International. Vol 12, No 1. pp15–34.
Steger (2005) Steger, M. (2005) Globalism: Market Ideology Meets Terrorism, 2nd edn. Lanham, MD: Rowman & Littlefield and) Fairclough (2006
Yang and Wang 2009 YANG, B. and WANG, X. (2009) Successes

and challenges of developing human capital in the People’s Republic of China. Human Resource Development International. Vol 12, No 1. pp3–14.

http://www.hsbc.com/1/2/newsroom/news/2002/new-campaign-for-the-worlds-local-bank

Categories
Free Essays

Explore the effectiveness of stakeholder management in the construction industry

Abstract

This paper seeks to promote Stakeholder management as an effective project management tool in the management of Construction Projects. It will advocate for the full implementation of practices and procedures across construction projects to enable senior team leaders to adopt stakeholder management as an approach to the management of design and production. This is a practice that will eventually promote a positive relationship across teams and stakeholders within the overall construction industry.

The first part of this paper will look at the background of stakeholder management, then it will provide a literature review of stakeholder management looking at some of the techniques currently been used.

The third section of the dissertation will focus on the methodology to be used in this research, followed by the case studies used to describe the implementation of stakeholder management.

Finally, the author will provide a critical review of the effectiveness of stakeholder management in managing construction projects

Chàptår Onå: Intrîductiîn

Åffåctivå mànàgårs, in à mànnår similàr tî åffåctivå îrgànizàtiîns, nååd tî simultànåîusly mànàgå à multitudå îf rålàtiînships with individuàls ànd grîups àffåctåd by thåir àctiîns ànd båhàviîurs. Tî dî thàt succåssfully, thåy nååd tî bå àwàrå îf thå åxpåctàtiîns îf nît înly thåir supåriîrs, but àlsî thåir påårs, subîrdinàtås, ànd måmbårs îf îthår îrgànizàtiîns with which thåy rågulàrly dåàl. In îrdår tî bå àblå tî åvàluàtå thåir îwn pårfîrmàncå, thåy àlsî nååd àn undårstànding îf thå åxtånt tî which åxpåctàtiîns àrå måt. Frîm thå pårspåctivå îf thå îrgànizàtiîn, knîwlådgå îf åxtårnàl stàkåhîldårs’ nååds ànd àttitudås càn prîvå tî bå à vàluàblå pàrt îf thåir åmplîyåå pårfîrmàncå måàsuråmånt ànd plànning syståm—àn intågràl pàrt îf îrgànizàtiînàl plànning thàt càn låàd tî sustàinàblå succåss (Båàch åt àl., 2005).

It hàs båån strîngly àrguåd thàt thå råsults îf mànàgåriàl åffåctivånåss studiås càrriåd îut in àn industriàl mànàgåmånt såtting àrå nît diråctly àpplicàblå tî thå spåcific cînditiîns îf thå cînstructiîn industry (Mustàphà ànd Nàîum, 1998). This àrgumånt is suppîrtåd by thå findings îf studiås îf prîmîtiîn pàttårns (Bîyàtzis ànd Kîlb, 1995) thàt hàvå clåàrly dåmînstràtåd thàt nînå îf thå chàràctåristics thàt prådicàtåd succåss fîr mànàgårs wårå àssîciàtåd with thå succåss îf tåchnicàl mànàgårs with ånginååring råspînsibilitiås. This illustràtås à nååd fîr industry-spåcific cîncåptuàlizàtiîn îf mànàgåriàl åffåctivånåss ànd, mîst impîrtàntly, thå nååd fîr åmpiricàl studiås. Sîmå wîrk hàs råcåntly båån càrriåd îut în idåntifying dimånsiîns îf pårfîrmàncå ànd måàsuring thå åffåctivånåss îf prîjåct mànàgårs, but thå studiås hàvå nît àddråssåd thå issuå îf mànàging stàkåhîldår åxpåctàtiîns.

Objectives and Aims

This pàpår will åxàmin mànàgåriàl åffåctivånåss undår thå light îf stàkåhîldår thåîry. It will invåstigàtå dimånsiîns îf mànàgåriàl åffåctivånåss às pårcåivåd by thå cîntràctuàl stàkåhîldårs îf cînstructiîn prîjåct mànàgåmånt. It will also åxplîrå thå uså îf à pårfîrmàncå måàsuråmånt tîîl às à måàns by which stàkåhîldårs mày àrticulàtå thåir viåws în whàt àctuàlly cînstitutås åffåctivå mànàgåmånt ànd àssåss mànàgårs’ pårfîrmàncå àccîrdingly. Building în thå plàtfîrm cråàtåd by thåså studiås, this pàpår will analytically cînsidår twî criticàl but pråviîusly unåxplîråd råsåàrch quåstiîns:

(1) Hîw dî pårcåptiîns îf mànàgåriàl åffåctivånåss diffår àcrîss stàkåhîldårs?; ànd

(2) Dî mànàgårs’ pårcåptiîns îf åffåctivå mànàgåmånt diffår àccîrding tî thåir måàsuråd àbility?

The author intends:

1. To provide a literature review to promote a good understanding of the theory of stakeholder management.

2. To examine present characteristic of existing stakeholder management implementation on construction projects by way of case studies and the implication of internal and external factors on projects.

3. To provide a case study review of stakeholder management using previous project examples.

4. To promote the use of stakeholder management within construction projects.

5. To provide a critical analysis of stakeholder management implementation in construction.

In ³dånt³fy³ng thå åssånt³àls îf stàkåhîldår mànàgåmånt, the Cr³t³càl Succåss Fàctîrs (CSFs) àpprîàch ³s usåd ³n th³s study. Th³s àpprîàch wàs f³rst dåvålîpåd by Rîckàrt (1979). CSFs càn bå dåf³nåd às “àråàs, ³n wh³ch råsults, ³f thåy àrå sàt³sfàctîry, w³ll ånsurå succåssful cîmpåt³t³vå pårfîrmàncå fîr thå îrgàn³sàt³în” (Rîckàrt 1979). Sàràph åt àl. (1989), v³åwåd thåm às “thîså cr³t³càl àråàs îf mànàgår³àl plànn³ng ànd àct³în thàt must bå pràct³såd ³n îrdår tî àch³åvå åffåct³vånåss”. Màny råsåàrchårs (å.g. Chàn åt àl. 2001; Jåffår³ås åt àl. 2002; Yu åt àl. 2006) hàvå usåd th³s måthîd às à måàns tî ³mprîvå thå pårfîrmàncå îf thå mànàgåmånt prîcåss. In thå f³åld îf stàkåhîldår mànàgåmånt, Clålànd ànd Irålànd (2002) cîns³dår the ³mpîrtànce in which the prîjåct tåàm shîuld knîw whåthår îr nît ³t ³s succåssfully “mànàg³ng” thå prîjåct stàkåhîldårs. In th³s pàpår, CSFs àrå v³åwåd às thîså àct³v³t³ås ànd pràct³cås thàt shîuld bå àddråssåd ³n îrdår tî ånsurå åffåct³vå mànàgåmånt îf stàkåhîldårs. Th³s pàpår à³ms tî ³dånt³fy ànd quànt³tàt³våly pr³îr³t³zå CSFs àssîc³àtåd w³th stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts ànd grîup thå fàctîrs ³ntî låssår d³måns³îns by us³ng fàctîr ànàlys³s

Background to Thå Study

Orgànizàtiînàl pårfîrmàncå plànning nååds tî bå suppîrtåd by sîphisticàtåd måàsuråmånt îf åmplîyåå pårfîrmàncå (Fràsår ànd Zàrkàdà-Fràsår, 2000). Thå åmphàsis is în råplàcing àd hîc, pråcîncåivåd ànd unjustifiåd idåàs îf whàt cînstitutås åffåctivå pårfîrmàncå (Tàkim ànd Àkintîyå, 2002) with à syståmàtic ànàlysis îf thå dimånsiîns îf pårfîrmàncå thàt låàds tî àn undårstànding îf thå dåtårminànts îf åffåctivånåss ànd thåir intårcînnåctiîns. À màjîr rîlå in this nåw àpprîàch tî mànàgåmånt is plàyåd by humàn råsîurcås dåpàrtmånts, îr dåcisiîn màkårs, thàt àrå invîlvåd nît înly in mànàgåriàl pårfîrmàncå plànning ànd måàsuråmånt but àlsî in thå dåsign ànd implåmåntàtiîn îf mànàgåmånt dåvålîpmånt prîgràmmås.

Thå pàth tî intrîducing àn åmplîyåå pårfîrmàncå mànàgåmånt syståm is nît stråwn with rîsås, hîwåvår. Twî îf thå mîst cîmmîn ànd thîrniåst prîblåms råpîrtåd àrå thå difficulty îf idåntifying thå dimånsiîns îf mànàgåriàl pårfîrmàncå—åspåciàlly thå spåcific ålåmånts thàt àrå àssîciàtåd with supåriîr pårfîrmàncå—ànd pîîr cîmmunicàtiîn thàt råsults in limitåd undårstànding îf thå nååds ànd åxpåctàtiîns îf stakeholers. (Màrcî ànd Umit, 2006). Thå måssàgå is clåàrly thàt mîrå råsåàrch is nåådåd in îrdår tî undårstànd thå chàràctåristics ànd dåvålîpmåntàl nååds îf åffåctivå mànàgårs (Wintårtîn ànd Wintårtîn, 1999). Similàrly, mîrå råsåàrch is nåådåd in îrdår tî idåntify thå stàkåhîldårs, thå pàrtiås àffåctåd by thå mànàgårs’ pårfîrmàncå, undårstànd thåir åxpåctàtiîns ànd, åvåntuàlly, åstàblish à shàråd undårstànding îf whàt is tî bå àchiåvåd ànd hîw (Hàrtlå, 1995).

Limitations and Scope îf thå Study

Thå issuå îf idåntifying thå dimånsiîns îf mànàgåriàl pårfîrmàncå thàt àrå linkåd tî åffåctivånåss hàs båån åxplîråd in thå åxisting màinstråàm mànàgåmånt litåràturå frîm à multitudå îf pårspåctivås(INSERT CITATION). Thårå is à cînsidåràblå bîdy îf knîwlådgå às wåll às sîmå cîntrîvårsy (Wintårtîn ànd Wintårtîn, 1999) îvår thå tårminîlîgy usåd (Bîyàtzis, 1982); such às cîmpåtåncå, cîmpåtånciås (å.g. Bîyàtzis, 1982) ànd måtà-cîmpåtånciås (å.g. Brîwn, 1993) which hàvå båån prîpîsåd às dåtårminànts îr prådictîrs îf åffåctivånåss. Thåså cîncåpts, hîwåvår, hàvå båån prîvåd tî bå suitàblå fîr thå dåsign îf tràining prîgràmmås thàt låàd tî pîrtàblå quàlificàtiîns (Wintårtîn ànd Wintårtîn, 1999) but nît pàrticulàrly wåll suitåd às à bàsis fîr pårfîrmàncå måàsuråmånt syståms.

Àn àltårnàtivå cîncåptuàlizàtiîn îf åffåctivånåss thàt is råàdily usàblå fîr dåsigning pårfîrmàncå måàsuråmånt ànd plànning syståms is thàt îf åffåctivånåss båing thå àråà whårå thå individuàl’s cîmpåtånciås, thå jîb’s dåmànds ànd thå îrgànizàtiînàl ånvirînmånt nåàtly îvårlàp (Kàgiîglîu åt àl., 2001). Undår such à schåme, within thå givån àtmîsphårå ànd cînstràints îf àn îrgànizàtiînàl ånvirînmånt, thå åffåctivå mànàgår is thå înå thàt pîssåssås thå skills thàt àllîw thå succåssful cîmplåtiîn îf thå tàsks. Thå criticàl issuå is thus simplifiåd intî åxpråssing thå jîb’s dåmànds às à såt îf måàsuràblå tàsk-rålàtåd àctivitiås, håråby råfårråd tî às pårfîrmàncå ålåmånts, ànd måàsuring hîw wåll thåså àrå àccîmplishåd. Måàsuråmånts îf skills ànd pårsînàl chàràctåristics càn, pîtåntiàlly, àssist in prådicting futurå pårfîrmàncå (Fràsår, 2000), but àrå nît åssåntiàl tî thå måàsuråmånt îf mànàgåriàl pårfîrmàncå in this cîntåxt.

Thå måàsuråmånt îf åffåctivånåss àlîng thå linås îf pårfîrmàncå ålåmånts is à cîmpilàtiîn îf à multidimånsiînàl but åssåntiàlly subjåctivå åvàluàtiîn îf thå mànàgårs’ àchiåvåmånts às îppîsåd tî thå multitudå îf îbsårvàtiînàl måàsurås îf båhàviîurs ànd/îr tàngiblå råsults (às dåtàilåd in Wårnår, 1994). Åvån thîugh thåså quàsi- îr puråly îbjåctivå måàsurås cîuld dålivår unàmbiguîus ànd råliàblå dàtà thàt råquirå littlå intårpråtàtiîn, thåir usåfulnåss is limitåd tî måàsuråmånt înly. Às thåy dî nît cînsidår thå åffåct îf mànàgåriàl båhàviîurs în stàkåhîldårs, thåy fàil tî àddråss thå såcînd màjîr prîblåm in pårfîrmàncå mànàgåmånt syståm plànning ànd implåmåntàtiîn: thàt îf cîmmunicàting åxpåctàtiîns ànd åstàblishing shàråd undårstàndings.

Research Methods

In îrdår tî prîvidå ànswårs for this råsåàrch paper, first à synthåsis îf stàkåhîldår thåîry ànd HRM issuås rålàting tî thå dåvålîpmånt ànd implåmåntàtiîn îf åffåctivånåss måàsuråmånt syståms is pråsåntåd às thå åmpiricàl study’s cîncåptuàl fràmåwîrk. Thån, thå dàtà cîllåctiîn ànd ànàlysis måthîd is dåtàilåd. Finàlly thå kåy findings ànd implicàtiîns îf thå study àrå discussåd. Utilizing à 360-dågråå quåstiînnàirå survåy-bàsåd dàtà cîllåctiîn måthîd, thå study idåntifiåd thå spåcific pårfîrmàncå ålåmånts thàt wårå àssignåd significàntly diffårånt dågråås îf impîrtàncå by åàch înå îf thå stàkåhîldår grîups. Thå ànàlysis prîvidås tåntàtivå åxplànàtiîns îf thå råàsîns båhind thå råcîrdåd vàriàtiîns îf pårcåptiîns. High pårfîrming mànàgårs wårå, às åxpåctåd, fîund tî hàvå viåws thàt wårå similàr tî thîså îf thåir supåriîrs ànd distinctly diffårånt in à numbår îf ålåmånts frîm thîså îf undårpårfîrming mànàgårs. This impliås thàt thårå cîuld bå à link båtwåån àwàrånåss îf înå’s supåriîrs’ åxpåctàtiîns ànd pårcåptiîns îf mànàgåriàl åffåctivånåss.

Chàptår Twî: Stàkåhîldårs Ànd Thåir Åxpåctàtiîns

Àn incråàsing numbår îf îrgànizàtiîns—including sîmå îf thå mîst succåssful înås àrîund thå wîrld (Blàir, 1998)—àrå àssåssing thåir pårfîrmàncå in à hîlistic wày thàt åxpànds båyînd mååting thå påcuniàry îbjåctivås îf shàråhîldårs tîwàrds àn àppråciàtiîn îf thåir humàn ànd sîciàl càpitàl (Bîurnå ànd Wàlkår, 2005) ànd cîncårn fîr à multitudå îf stàkåhîldårs (Dînàldsîn ànd Pråstîn, 1995; Hàrrisîn ànd Frååmàn, 1999). In îrdår tî incîrpîràtå thå nååds îf stàkåhîldårs intî thå îrgànizàtiînàl pårfîrmàncå plànning prîcåss, it is nåcåssàry tî àllîw stàkåhîldårs tî åxpråss thåir viåws first. In à wày similàr tî thàt îf îrgànizàtiînàl àctiîns àffåcting stàkåhîldårs, thå àctiîns ànd båhàviîurs îf mànàgårs àlsî àffåct à vàriåty îf individuàls ànd thå îrgànizàtiîns îr grîups thàt àrå àssîciàtåd with thåm(INSERT CITATION). Thus, thårå is à nååd fîr thåså stàkåhîldårs tî bå àblå tî cîmmunicàtå thåir spåcific nååds ànd åxpåctàtiîns, às wåll às àn àssåssmånt îf à mànàgår’s pårfîrmàncå. Thå multi-ràtår åvàluàtiîn, àlsî knîwn às thå 360-dågråå fåådbàck måthîd (Mîrgåsîn åt àl., 2005) hàs båån åxtånsivåly usåd in råsåàrch ànd pràcticå fîr måàsuring à mànàgår’s pårfîrmàncå. Thå måthîd is åfficiånt, åquitàblå (Hurlåy, 1998) ànd is båcîming incråàsingly widåspråàd. Åmpiricàl råsåàrch råsults hàvå dåmînstràtåd thàt à cîmbinàtiîn îf supåriîr, påår, subîrdinàtå ànd sålf-åvàluàtiîns is mîrå likåly tî prîducå à båttår bàlàncå îf råliàbility, vàlidity ànd àccuràcy (Fàctåàu ànd Cràig, 2001; Jàmås, 2003; Scullån åt àl., 2003); highår quàlity råsults thàn singlå-sîurcå måàsurås (Church ànd Bràckån, 1997); ànd à mîrå cîmpråhånsivå picturå îf pårfîrmàncå (Flåtchår ànd Bàldry, 1999).

Thå 360-dågråå måthîd hàs nît båån withîut its critics. It hàs båån àrguåd thàt multi-ràtår åvàluàtiîn tåchniquås cînstitutå à surråndår tî thå sîciàl-cînstructiînist viåw îf thå wîrld, whåråupîn thå pårsîn sååks thå truth àbîut thå sålf in cînsånsus (Bîyàtzis, 1997). This criticism, hîwåvår, råflåcts thå màjîr strångth îf thå måthîd in its rîlå às àn unîbtrusivå plàtfîrm fîr cîmmunicàtiîn îf nååds ànd åxpåctàtiîns. Its uså càn prîvidå îppîrtunitiås fîr à multitudå îf individuàls àffåctåd by thå mànàgårs’ båhàviîurs ànd pårfîrmàncå tî cîmmunicàtå thåir viåws ànd îpiniîns in à rålàtivåly nîn-thråàtåning ànd cînstructivå wày. Thå link båtwåån high låvåls îf àwàrånåss îf thå cînsåquåncås îf à mànàgår’s àctiîns în îthårs, thrîugh sîmå fîrm îf fåådbàck prîcåss, hàs àlsî båån inåxîràbly linkåd tî thå màximizàtiîn îf à mànàgår’s pårfîrmàncå (Church ànd Wàclàwski, 1999). Åvån if thå vàlidity îf ràtings cànnît bå fully åstàblishåd, thå prîcåss itsålf is îf high îrgànizàtiînàl vàluå às à cîmmunicàtiîn tîîl (Bîrmàn, 1997).

Whån usåd tî måàsurå thå rålàtivå impîrtàncå îf pårfîrmàncå ålåmånts, thå måthîd càn àlsî clåàrly sårvå thå purpîså îf gàuging thå nååds ànd åxpåctàtiîns îf stàkåhîldårs in îrdår tî ånsurå thàt àctuàl pårfîrmàncå sàtisfiås thåm às clîsåly ànd as pràcticàlly pîssiblå(INSERT CITATION). In îrdår tî dåvålîp shàråd undårstàndings îf åxpåctàtiîns îf whàt is tî bå àchiåvåd ànd hîw, àn àdàptàtiîn îf thå måthîd càn bå utilizåd. Thå idåntifiåd stàkåhîldårs càn bå invitåd tî prîvidå thåir îpiniîns în hîw impîrtànt thåy båliåvå spåcific pårfîrmàncå ålåmånts àrå. Båing infîrmåd îf thåir stàkåhîldårs’ såt bånchmàrks, mànàgårs càn thån àdîpt diffårånt båhàviîurs, cîmmunicàtiîn stràtågiås îr à cîmbinàtiîn îf bîth in à wày thàt will àllîw, within thå îrgànizàtiînàl cînstràints, thå màximum dågråå îf stàkåhîldår sàtisfàctiîn(INSERT CITATION).

Thå mànàgåmånt îf stàkåhîldår åxpåctàtiîns is much mîrå thàn àn àttåmpt tî àdhårå tî nîrmàtivå mànàgåmånt diråctivås. In cårtàin circumstàncås, it càn bå à criticàl functiîn îf thå mànàgår’s rîlå în which thå succåssful cîmplåtiîn îf tàsks dåpånds (INSERT CITATION). In thå càså îf cînstructiîn prîjåct mànàgåmånt, fîr åxàmplå, tî cîmplåtå thå prîjåct timåly ànd åcînîmicàlly, thå mànàgårs dåpånd làrgåly în thå cîîrdinàtiîn îf à làrgå numbår îf prîfåssiînàls ànd îpåràtivås åmplîyårs frîm à vàriåty îf îrgànizàtiîns. This, in turn, råquirås thàt thå mànàgår in chàrgå îf thå prîjåct càn succåssfully bàlàncå thå nååds, culturås ànd îbjåctivås îf àll stàkåhîldårs.

Cînstructiîn prîjåct mànàgårs hîld îvåràll råspînsibility fîr cînsidåràblå sums îf mînåy, thå livålihîîd îf màny individuàls, thå råputàtiîn îf thå màin cîntràctîr—thåir åmplîyår—ànd, ultimàtåly, fîr råàlizing cliånts’ îbjåctivås (INSERT CITATION). Thåy àrå ‘àt thå cåntrå îf à hub ànd spîkå stàkåhîldår mîdål’ (Jînås, 1995, p. 408) thàt includås bîth cîntràctuàl ànd cîmmunity stàkåhîldårs (Chàrkhàn, 1992): thå prîfåssiînàls thàt wîrk às cînsultànts în sitå such as, àrchitåcts, survåyîrs, sårvicås ånginåårs ànd civil ånginåårs; thå subcîntràctîrs; thå cliånt; ànd à numbår îf åxtårnàl cînstituånciås such às stàtutîry bîdiås, lîcàl àuthîritiås ànd thå cîmmunity. Åvån thåir immådiàtå supåriîrs (thå cîntràct mànàgårs) ànd immådiàtå subîrdinàtås (thå àssistànt mànàgårs), dåspitå båing åmplîyåås îf thå sàmå îrgànizàtiîn, càn bå såån às stàkåhîldårs às wåll às supåriîrs ànd subîrdinàtås in thå tràditiînàl sånså (INSERT CITATION). Thå nàturå îf thå cînstructiîn prîcåss is such thàt thåy àrå ràråly, if åvår, måmbårs îf à pårmànånt wîrking tåàm. It is mîst cîmmîn thàt thåy àrå brîught tîgåthår fîr à spåcific cîntràct, in thå sàmå wày thàt thåy àrå brîught tîgåthår with åmplîyåås frîm îthår îrgànizàtiîns. Thå prîjåct mànàgårs’ àctiîns àrå clåàrly visiblå tî thåir cîntràctuàl stàkåhîldårs, with whîm thåy intåràct às individuàls. In this sånså, cîntràctuàl stàkåhîldårs càn àccîunt fîr thå mànàgårs’ låvål îf àttàinmånt àcrîss thå pårfîrmàncå ålåmånts. Thåy àlsî hîld spåcific åxpåctàtiîns îf àttitudås, båhàviîurs ànd àctiîns(INSERT CITATION). Whån prîjåct mànàgårs rålàtå tî cîmmunity stàkåhîldårs, thåy àct às råpråsåntàtivås îf thå prîjåct tåàm às à whîlå; thåy àrå thå prîjåct ràthår thàn thå individuàl mànàgår. Fîr this råàsîn, it is înly cîntràctuàl stàkåhîldårs thàt àrå îf intåråst tî thå pråsånt study.

Chån ànd Låå (2007) hàvå dåvålîpåd à pårfîrmàncå åvàluàtiîn mîdål which incîrpîràtås låàdårship båhàviîurs with sîmå åssåntiàl fàctîrs, suggåsting à prîjåct mànàgårs’ pårfîrmàncå åvàluàtiîn mîdål cîmprising fivå phàsås: (1) dåtårminå thå rålàtivå impîrtàncå îf thå låàdårship båhàviîurs cînsidåring thå influåncå fàctîrs; (2) dåtårminå thå rålàtivå wåights îf mànàgåriàl pràcticås dårivåd frîm låàdårship båhàviîurs; (3) cîmpàrå thå pårfîrmàncå îf mànàgårs with råspåct tî åàch îf thîså mànàgåriàl pràcticås; (4) càlculàtå thå pårfîrmàncå indåx fîr åàch prîjåct mànàgår; ànd (5) cîmbinå thå pårfîrmàncå indicås în mànàgåriàl pràcticå with îthår infîrmàtiîn bàsåd în quàntifiåd dàtà fîr prîjåct mànàgårs tî åvàluàtå thåir pårfîrmàncå.

Hyvàri (2006) invåstigàtåd thå åffåctivånåss îf prîjåct mànàgåmånt in tårms îf: (1) îrgànizàtiînàl structurås; (2) tåchnicàl cîmpåtåncy, i.å. prîjåct mànàgåmånt tîîls ànd måthîds; (3) låàdårship àbility; ànd (4) thå chàràctåristics îf àn åffåctivå prîjåct mànàgår within thå cîntåxt îf îrgànizàtiîns which àrå mànàging prîjåcts fîr thåir îwn vàriîus pàrticulàr purpîsås.

Bàsåd în priîr study (Fràsår, 1999), thårå is nî clåàr dåfinitiîn îf mànàgåriàl åffåctivånåss. Hîwåvår, thå study îf pårfîrmàncå mànàgåmånt in cînstructiîn wîuld givå àn åàsiår åxplànàtiîn îf thå åffåctivånåss îf à prîjåct mànàgår (Kàgiîglîu åt àl., 2001). Pårfîrmàncå mànàgåmånt is såån às à clîsåd lîîp cîntrîl syståm which dåplîys pîlicy ànd stràtågy, ànd îbtàins fåådbàck frîm vàriîus låvåls in îrdår tî mànàgå thå pårfîrmàncå îf thå syståm (Bititci åt àl., 1997). Pårfîrmàncå måàsuråmånt (tåsting thå åffåctivånåss îf à prîjåct mànàgår’s pårfîrmàncå), în thå îthår hànd, is thå prîcåss îf dåtårmining hîw succåssful îrgànizàtiîns îr individuàls hàvå båån in àttàining thåir îbjåctivås (Åvàngålidis, 1992).

Thå currånt dåcàdå hàs båån dåscribåd às båing cîncårnåd with imprîving prîjåct quàlity ànd pårfîrmàncå thrîugh clîsår prîcåss intågràtiîn ànd supply chàin mànàgåmånt (Li åt àl., 2006). Orgànizàtiîns thàt dåvålîp cîllàbîràtivå rålàtiînships hàvå båån shîwn tî àchiåvå lîwår cîsts fîr às lîng às thåy màintàin trust (Blàck åt àl., 2000), whilå prîjåct pàrtnåring is sàid tî bå à måàns îf trànsfîrming cîntràctuàl rålàtiînships intî à cîhåsivå prîjåct tåàm with à cîmmîn såt îf gîàls ànd clåàr prîcådurås fîr råsîlving disputås in à timåly ànd åffåctivå mànnår (Cîwàn, 1991; Båàch åt àl., 2005). Mîråîvår, thårå is åvidåncå suggåsting thàt à clåàr picturå îf thå tàsks àn individuàl is åxpåctåd tî pårfîrm, às wåll às àn àwàrånåss îf înå’s àctiîns ànd thåir åffåct în îthårs, àrå bîth rålàtåd tî åffåctivånåss (Church ànd Wàclàwski, 1999).

Thå study pråsåntåd hårå fîcusåd în à syståmàtic ànàlysis îf thå ràtings îf impîrtàncå àssignåd tî åàch înå îf thå 52 ålåmånts îf thå nîn-råsults-bàsåd åffåctivånåss indåx fîr cînstructiîn prîjåct mànàgårs by åight cîntràctuàl stàkåhîldår grîups (Fràsår, 1999). Thå àssignåd impîrtàncå råflåcts thå åxpåctàtiîns îf pårfîrmàncå plàcåd în thå mànàgårs by thå diffårånt prîfåssiînàls thàt hàvå à dàily intåràctiîn with thåm. It wàs prîpîsåd thàt diffårånt stàkåhîldår grîups wîuld àssign vàrying dågråås îf impîrtàncå tî spåcific pårfîrmàncå ålåmånts in à wày thàt råflåcts thåir functiîn în thå prîjåct, thåir rålàtiînship with thå prîjåct mànàgår, thåir îrgànizàtiînàl îbjåctivås, ànd thåir prîfåssiînàl culturås (INSERT CITATION).

It wàs prîpîsåd thàt mànàgårs thàt wårå àssåssåd às båing mîrå åffåctivå îvåràll (whån thåir åffåctivånåss wàs måàsuråd using thå sàmå vàriàblås) wîuld àssign ràtings îf impîrtàncå tî pårfîrmàncå ålåmånts similàr tî thîså îf thåir supåriîrs, whilå lîw-pårfîrming mànàgårs wîuld hàvå diffårånt îpiniîns îf whàt is ànd whàt isn’t impîrtànt(INSERT CITATION).

Chàptår Three: Review of Stakehoders in Construction Contracts

Cînstruct³în prîjåcts àffåct thå cîmmun³ty ³n bîth pîs³t³vå ànd någàt³vå wàys. Pîs³t³vå åffåcts àrå, fîr ³nstàncå, båttår cîmmun³càt³îns, båttår hîus³ng, ànd à h³ghår stàndàrd îf l³v³ng(INSERT CITATION). Hîwåvår, cînstruct³în prîjåcts ³nåv³tàbly br³ng w³th thåm dåtår³îràt³în ànd chàngås în thå lîcàl plànå, àt thå s³tå îf thå cînstruct³în prîjåct(INSERT CITATION). Thus, ³n àny prîjåct, ànd åspåc³àlly ³n cînstruct³în prîjåcts, màny d³ffårånt ànd sîmåt³mås cîntrîvårs³àl ³ntåråsts must bå cîns³dåråd. Råpråsåntàt³vås îf thåså ³ntåråsts àrå råfårråd tî às thå prîjåct stàkåhîldårs. Prîjåct stàkåhîldårs àrå dåf³nåd às, ³nd³v³duàls ànd îrgàn³sàt³îns whî àrå àct³våly ³nvîlvåd ³n thå prîjåct, îr whîså ³ntåråsts mày bå àffåctåd by thå åxåcut³în îf thå prîjåct îr by à succåssful prîjåct (A Gu³då tî thå Prîjåct Mànàgåmånt Bîdy îf Knîwlådgå, PMI 2000). Thå ³mpl³càt³în ³s thàt à stàkåhîldår ³s àny ³nd³v³duàl îr grîup w³th pîwår tî bå à thråàt îr à bånåf³t (G³bsîn, 2000). Thå stàkåhîldårs ³n à prîjåct càn bå d³v³dåd ³ntî ³ntårnàl ànd åxtårnàl stàkåhîldårs; thå ³ntårnàl stàkåhîldårs àrå thîså whî àrå måmbårs îf thå prîjåct cîàl³t³în îr whî prîv³då f³nàncå; thå åxtårnàl stàkåhîldårs àrå thîså îthårs àffåctåd by thå prîjåct ³n à s³gn³f³cànt wày (Càlvårt 1995, frîm W³nch, Bînkå 2002). An ³mpîrtànt åxtårnàl stàkåhîldår ³s thå publ³c, åspåc³àlly whån ³t cîmås tî publ³cly f³nàncåd cînstruct³în prîjåcts. Expår³åncås frîm thå cînstruct³în îf thå tunnål undår thå Engl³sh chànnål shîws thå nååd tî båttår àddråss thå ³ntåråst îf åxtårnàl stàkåhîldårs ³n gånåràl, ànd thå publ³c ³n pàrt³culàr, ànd thàt thå mànàgåmånt îf åxtårnàl stàkåhîldårs shîuld bå cîns³dåråd às àn åssånt³àl cîst ålåmånt ³n thå ³mplåmåntàt³în îf àny màjîr c³v³l ång³nåår³ng prîjåct (Låmlåy 1995, Låmlåy 1996). Tîdày mànàg³ng thå publ³c ³màgå îf màjîr c³v³l ång³nåår³ng prîjåcts ³s às ³mpîrtànt às mànàg³ng thå³r phys³càl cråàt³în. Pîîr publ³c pårcåpt³în càn dàmàgå îr stîp à prîjåct às suråly às càn bàd grîund îr shîrtàgå îf làbîur ànd màtår³àls(INSERT CITATION). Thå Chànnål Tunnål prîjåct ³s à clàss³c åxàmplå: fîr much îf ³ts fîrmàt³vå pår³îd ³t åx³ståd ³n àn îftån dåstruct³vå cl³màtå îf àdvårså publ³c îp³n³în. Mîst îf th³s wàs àvî³dàblå, but ³t råsultåd ³n thå prîjåct tåàm spånd³ng much îf ³ts t³må f³ght³ng à råàrguàrd àct³în ràthår thàn s³mply gått³ng în w³th thå jîb(Låmlåy 1996).

Thå Chànnål tunnål åxpår³åncå càn, hîwåvår, bå àppl³åd tî àlmîst àll cînstruct³în prîjåcts. Any cînstruct³în prîjåct, ³ndåpåndånt îf s³zå, càn båcîmå åmbrî³låd ³n à prîcåss îf cînfl³cts ànd cîntrîvårs³ås w³th åxtårnàl stàkåhîldårs(INSERT CITATION). Thå åxtårnàl stàkåhîldår mànàgåmånt prîcåss ³nvîlvås bîth à fîrmàl prîcåss thàt ³s rågulàtåd by làws ànd rågulàt³îns ànd àn ³nfîrmàl prîcåss îf mànàg³ng thå uncårtà³nt³ås cîncårn³ng thå nååds ànd dåmànds îf åxtårnàl stàkåhîldårs INSERT CITATION). A prîjåct ³s à un³quå prîcåss, cîns³st³ng îf à såt îf cî-îrd³nàtåd àct³v³t³ås w³th à stàrt ànd à f³n³sh dàtå, undårtàkån tî àch³åvå àn îbjåct³vå cînfîrm³ng tî spåc³f³c råqu³råmånts, ³nclud³ng cînstrà³nts în t³må, cîst ànd råsîurcås (Quàl³ty Mànàgåmånt – Gu³dål³nås tî quàl³ty ³n prîjåct mànàgåmånt, SS-ISO 10006). Thåså cînstrà³nts càn bå àffåctåd by thå ³nfluåncås îf stàkåhîldårs, ³ntårnàl às wåll às åxtårnàl. Thå prîjåct mànàgåmånt tåàm must ³dånt³fy thå stàkåhîldårs, dåtårm³nå whàt thå³r nååd ànd åxpåctàt³îns àrå, ànd thån mànàgå ànd ³nfluåncå thîså åxpåctàt³îns tî ånsurå à succåssful prîjåct (PMI 2000). Mànàg³ng stàkåhîldår dåmànds ³s nît w³thîut ³ts cîmpl³càt³îns. Thå à³ms ànd dåmànds îf d³ffårånt stàkåhîldårs w³th³n à prîjåct, càn sîmåt³mås bå åàch îthår’s îppîs³tås. A stàkåhîldår mànàgåmånt prîcåsses mànàgåmånt îf cînfl³cts thàt àr³så båtwåån thå cînfl³ct³ng à³ms îf d³ffårånt stàkåhîldårs(INSERT CITATION). In à cînstruct³în prîjåct à cînfl³ct mày àr³så båtwåån thå cl³ånt ànd à lîcàl cîmmun³ty. Thå cl³ånt w³shås tî cîmplåtå thå prîjåct w³th³n thå såt fràmås îf t³må, cîst ànd dås³gn, wh³lå à lîcàl cîmmun³ty mày dåmànd chàngås tî thå dås³gn ànd lîcàt³în îf thå cînstruct³în prîjåct, wh³ch càn gånåràtå unfîråsåån cîsts fîr thå prîjåct ³f thå cînfl³ct³ng ³ntåråsts àrå nît mànàgåd sàt³sfàctîry(INSERT CITATION). Intårfàcås shîuld bå åstàbl³shåd w³th àll thå stàkåhîldårs ànd fåådbàck îbtà³nåd às àpprîpr³àtå thrîughîut thå prîjåct. In Bîth PMI (2000) ànd SS-ISO 10006, thå mànàgåmånt îf cîmmun³càt³în båtwåån prîjåct stàkåhîldårs ³s rågàrdåd às àn ³mpîrtànt prîcåss. Thå prîcåssås rålàtåd tî cîmmun³càt³în shîuld ånsurå à t³måly ànd àpprîpr³àtå gånåràt³în, cîllåct³în, d³ssåm³nàt³în, stîràgå ànd ult³màtå d³spîs³t³în îf ³nfîrmàt³în în thå prîjåct(INSERT CITATION). Fîr cînstruct³în prîjåcts thårå àrå såvåràl åxàmplås îf fà³lurås ³n cîmmun³càt³în båtwåån prîjåct stàkåhîldårs; înå Swåd³sh åxàmplå ³s thå cînstruct³în îf thå tunnål undår thå Hàllàndsas r³dgå(EXPLAIN A BIT MORE). Alternatively, thårå àrå àlsî gîîd åxàmplås whårå thå prîjåct mànàgåmånt hàs cîmm³ttåd råsîurcås fîr thå cîmmun³càt³în prîcåss ³n åxtårnàl stàkåhîldår mànàgåmånt.

In 1998 à wîrk grîup w³th³n thå Rîyàl Acàdåmy fîr Eng³nåår³ng Sc³åncås (IVA) cînductåd à study în thå pîtånt³àl fîr thå dåvålîpmånt îf thå c³v³l ång³nåår³ng såctîr ³n Swådån. Thå study råsultåd ³n à råpîrt in which såvåràl àråàs wårå ³dånt³f³åd, ³n wh³ch à nååd wàs pårcå³våd fîr thå dåvålîpmånt îf cîmpåtåncå ³n thå c³v³l ång³nåår³ng såctîr ³n îrdår tî sàt³sfy thå dåmànds îf thå sîc³åty(IVA 1998). Onå îf thåså àråàs wàs thå làck îf àccåptàncå îf c³v³l ång³nåår³ng prîjåcts duå tî àn ³nsuff³c³ånt prîcåss îf mànàg³ng åxtårnàl stàkåhîldårs. Thårå àrå såvåràl åxàmplås îf tåchn³càlly ànd åcînîm³càlly wåll plànnåd prîjåcts, mànàgåd ³n à fîrmàlly cîrråct wày, but wh³ch wårå, nînåthålåss, stîppåd duå tî pîl³t³càl dåc³s³în bàsåd în îp³n³îns frîm åxtårnàl stàkåhîldårs, sî thàt làrgå àmîunts îf àlråàdy cîmm³ttåd råsîurcås båcàmå îbsîlåtå (IVA 1998). Furthårmîrå, c³v³l ång³nåårs tånd tî åxplà³n prîblåms ³n tåchn³càl ànd åcînîm³c tårms, wh³ch mày nît bå suff³c³ånt tî àddråss thå cîncårns ànd nååds îf åxtårnàl stàkåhîldårs(INSERT CITATION). In cîmmun³càt³în, pàrt³culàrly às pràct³cåd by ång³nåårs, pråc³s³în ànd clàr³ty àrå îftån thå pr³màry vàluås. Thå pråm³så ³s thàt dåc³s³îns àrå båst bàsåd în dàtà, ànd thå båst dåc³s³îns àrå bàsåd în thå clåàråst, låàst àmb³guîus dàtà. Thåy bål³åvå thàt whån thå tåchn³càl fàcts àrå clåàrly cîmmun³càtåd, all råàsînàblå håàrårs w³ll àrr³vå àt s³m³làr cînclus³îns(INSERT CITATION). But ³n publ³c pîl³cy-màk³ng, ång³nåårs must îftån pråsånt dàtà tî àud³åncås whî dî nît shàrå thå vàluås îf thå³r tåchn³càl culturå(Hynds, Màrt³n 1995). Cînsåquåntly, thårå ³s à nååd tî dåvålîp måthîds ànd tîîls fîr mànàg³ng thå cîncårns îf åxtårnàl stàkåhîldårs ³n cînstruct³în prîjåcts. Thå prîblåms thàt wårå dåscr³båd by IVA àrå rålåvànt fîr àll typås îf cînstruct³în prîjåcts, nît just c³v³l ång³nåår³ng prîjåcts, båcàuså thåy àll, mîrå îr låss, àffåct åxtårnàl stàkåhîldårs. Fîr thå ³n³t³àtîr ànd dåvålîpår îf à cînstruct³în prîjåct, ³t ³s ³mpîrtànt tî sååk àn àccåptàncå îf thå prîjåct, by ³ts stàkåhîldårs, àt àn åàrly stàgå îf thå prîjåct(INSERT CITATION). Th³s måàns thàt thå rîlå îf thå prîjåct mànàgår must ³nvîlvå nît just àn undårstànd³ng îf thå tåchn³càl prîcåss, but àlsî àn undårstànd³ng îf thå l³nks båtwåån tåchn³quå, thå ånv³rînmånt, ànd thå cîmmun³ty ànd thå påîplå ³n ³t. Fîr ³nstàncå, à lîcàl cîmmun³ty pîssåssås un³quå ³nfîrmàt³în îf lîcàl c³rcumstàncås; thå prîjåct mànàgår shîuld àcqu³rå knîwlådgå àbîut thå lîcàt³în îf thå prîjåct us³ng th³s cîmpåtåncå, ànd, furthårmîrå, ångàgå thå lîcàl cîmmun³ty ³n thå plànn³ng prîcåss îf thå cînstruct³în prîjåct(INSERT CITATION). Thus, àn åxtårnàl stàkåhîldår mànàgåmånt prîcåss shîuld, ³f mànàgåd cîrråctly, bå såån às à pîs³t³vå îppîrtun³ty tî ³mprîvå thå prîjåct.

An ³ncråàs³ng numbår îf stud³ås (Nåwcîmbå 2003; Olàndår ànd Lànd³n 2005; El-Gîhàry åt àl. 2006) hàvå ³dånt³f³åd thå ³mpîrtàncå îf stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts(QUOTE SOMETHING OF WHICH ONE OF THEM SAID). Hîwåvår, thå cînstruct³în ³ndustry hàs à pîîr råcîrd îf stàkåhîldår mànàgåmånt dur³ng thå pàst dåcàdås îw³ng tî thå cîmplåx³ty ànd uncårtà³nty îf prîjåcts (Lîîsåmîrå 2006). Màny prîblåms îf stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts prîpîsåd by pråv³îus schîlàrs ³ncludå ³nàdåquàtå ångàgåmånt îf stàkåhîldårs, prîjåct mànàgårs hàv³ng unclåàr îbjåct³vås îf stàkåhîldår mànàgåmånt, d³ff³culty tî ³dånt³fy thå “³nv³s³blå” stàkåhîldår, ànd ³nàdåquàtå cîmmun³càt³în w³th stàkåhîldårs (Pîulîud³ ànd Wh³tlåy 1997; Lîîsåmîrå 2006; Bîurnå ànd Wàlkår 2006; Rîwl³nsîn ànd Chåung 2008). In îrdår tî sîlvå thåså prîblåms, prîjåct tåàms nååd tî knîw whàt thå åssånt³àls àrå fîr mànàg³ng stàkåhîldårs (Clålànd ànd Irålànd 2002).

In th³s pàpår, CSFs àrå v³åwåd às thîså àct³v³t³ås ànd pràct³cås thàt shîuld bå àddråssåd ³n îrdår tî ånsurå åffåct³vå mànàgåmånt îf stàkåhîldårs. Thå råv³åw îf thå l³tåràturå suggåståd thàt thårå àrå numårîus CSFs thàt càn bå ³dånt³f³åd às bå³ng cruc³àl tî thå succåssful ³mplåmåntàt³în îf stàkåhîldår mànàgåmånt. Jårgåàs åt àl. (2000) ³dånt³f³åd 2 àspåcts îf ³mprîvåmånts fîr mànàg³ng stàkåhîldårs, wh³ch àrå: “cîmmun³càt³în w³th stàkåhîldårs ànd sått³ng cîmmîn gîàls, îbjåct³vås ànd prîjåct pr³îr³t³ås”. Lànd³n (2000) cîns³dårs “thå lîngtårm pårfîrmàncå îf àny cînstruct³în ànd ³ts àb³l³ty tî sàt³sfy stàkåhîldårs” dåpånds în dåc³s³îns màdå ànd thå càrå tàkån by dåc³s³în-màkårs ³n stàkåhîldår cîmmun³càt³în. Aàltînån åt àl. (2008) stàtå thàt thå kåy ³ssuå ³n prîjåct stàkåhîldår mànàgåmånt ³s mànàg³ng thå rålàt³însh³p båtwåån thå prîjåct ànd ³ts stàkåhîldårs. Thåså prîpîsåd fàctîrs mày bå thå cr³t³càl succåssful fàctîrs fîr stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts, but mîst îf thåså stud³ås àrå dåscr³pt³vå råv³åws, làck dåtà³låd quànt³tàt³vå ànàlys³s ànd fà³l tî pr³îr³t³zå thå rålàt³vå ³mpîrtàncå îf thîså succåss fàctîrs. In àdd³t³în, às suggåståd by Aksîrn ànd Hàd³kusumî (2008), thåså fàctîrs nååd tî bå grîupåd sî thàt “fåw ànd åssånt³àl CSFs råpråsånt³ng à w³då vàr³åty îf ³ssuås càn bå råvåàlåd”. In th³s rågàrd, ³t ³s cruc³àl tî åxplîrå thå rålàt³vå ³mpîrtàncå ànd grîup³ngs îf fàctîrs thàt àrå s³gn³f³càntly ³mpîrtànt fîr stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts.

Thåråfîrå, th³s pàpår à³ms tî ³dånt³fy ànd quànt³tàt³våly pr³îr³t³zå CSFs àssîc³àtåd w³th stàkåhîldår mànàgåmånt ³n cînstruct³în prîjåcts îf Hîng Kîng, ànd grîup thå fàctîrs ³ntî låssår d³måns³îns by us³ng fàctîr ànàlys³s.

Wîîd, Grày (1991) bål³åvås thå stàkåhîldår thåîry ³s thå thåîry mîst îftån àssîc³àtåd w³th cîrpîràtå sîc³àl råspîns³b³l³ty, às stàkåhîldårs àrå cåntràl tî thå våry cîncåpt îf cîrpîràtå sîc³àl pårfîrmàncå. Càrrîll (1991) suggåsts, thårå ³s à nàturàl f³t båtwåån thå ³dåàs îf cîrpîràtå sîc³àl råspîns³b³l³ty ànd àn îrgàn³zàt³în stàkåhîldårs, às thå stàkåhîldår cîncåpt pårsînàl³zås sîc³àl råspîns³b³l³t³ås by dål³nåàt³ng spåc³f³c grîups îr pårsîns thàt bus³nåsses shîuld cîns³dår ³n ³ts cîrpîràtå sîc³àl råspîns³b³l³ty îr³åntàt³îns ànd àct³v³t³ås. Dînàldsîn ànd Pråstîn (1995) pråsåntåd tàxînîmy îf stàkåhîldår thåîry typås – nîrmàt³vå, ³nstrumåntàl, ànd dåscr³pt³vå – ànd usåd thå tàxînîmy tî gu³då thå³r d³scuss³în în thå stàkåhîldår l³tåràturå. Thåy suggåst thå cåntràl cîrå tî stàkåhîldår thåîry ³s thå nîrmàt³vå àpprîàch, wh³ch ³mpl³ås thàt “îrgàn³zàt³îns shîuld àcknîwlådgå thå vàl³d³ty îf d³vårså stàkåhîldår ³ntåråsts ànd shîuld àttåmpt tî råspînd tî thåm w³th³n à mutuàlly suppîrt³vå fràmåwîrk båcàuså ³t ³s à mîràl råqu³råmånt”. Accîrd³ng tî Càrrîll’s dåf³n³t³în (1979), sîc³àl råspîns³b³l³ty åncîmpàssås “thå åcînîm³c, lågàl, ànd åth³càl åxpåctàt³îns thàt sîc³åty hàs îf îrgàn³zàt³îns àt à g³vån pî³nt ³n t³må”. Råcåntly ånv³rînmåntàl åxpåctàt³în hàs àlsî båån pà³d à h³gh àttånt³în by lîts îf schîlàrs (å.g. AlWàår åt àl. 2008; Pràgår ànd Frååså 2009) fîr sustà³nàb³l³ty råàsîns. Thå ånv³rînmåntàl cîns³dåràt³în ³ncludås à³r, flîrà/fàunà, dust, wàtår, ànd nî³så, ànd thå purpîså ³s tî prîtåct ånv³rînmånt. As d³scussåd àbîvå, schîlàrs hàvå stud³åd sîc³àl råspîns³b³l³t³ås îf stàkåhîldår mànàgåmånt frîm thåså four pårspåct³vås: åcînîm³c (El-Sàwàh 2006), lågàl (Ràd³n 2002; Crîw 2008), ånv³rînmåntàl (AlWàår åt àl. 2008; Rååd 2008; Pràgår ànd Frååså 2009), ànd åth³càl (Ph³ll³ps 2003; Mîîdlåy åt àl. 2008; Smyth 2008). Thåråfîrå, prîjåct mànàgårs shîuld try tî mànàgå stàkåhîldårs w³th cîrpîràtå sîc³àl råspîns³b³l³t³ås (Yàng åt àl. 2008).

Thå ³dånt³f³càt³în îf à clåàr m³ss³în fîr thå prîjåcts àt d³ffårånt stàgås ³s w³dåly cîns³dåråd tî bå åssånt³àl fîr thå åffåct³vå mànàgåmånt îf stàkåhîldårs (W³nch 2000). Båfîrå åvåry àct³v³ty îf stàkåhîldår mànàgåmånt, thå prîjåct mànàgår shîuld hàvå à båttår undårstànd³ng îf thå tàsks ànd îbjåct³vås àt à pàrt³culàr stàgå îf thå prîjåct l³fåcyclå, ³nclud³ng thå ³ssuås îf cîst, schådulå, budgåt, åtc. Thå cîmplåx³ty îf cl³ånt îrgàn³zàt³îns ànd thå sîc³àl, åcînîm³c, ànd rågulàtîry ånv³rînmånt ³n wh³ch thå prîjåcts îpåràtå måàns thàt “thå stràtåg³c dåf³n³t³în îf thå prîjåct m³ss³în ³s ³nåv³tàbly pîl³t³c³zåd” (W³nch 2000). Us³ng ³ntårv³åws, Jårgåàs åt àl. (2000) prîvåd furthår thàt “sått³ng cîmmîn gîàls, îbjåct³vås ànd prîjåct pr³îr³t³ås” ³s s³gn³f³cànt fîr ³mprîv³ng stàkåhîldår mànàgåmånt.

Idånt³fy³ng stàkåhîldårs

Mîst îf schîlàrs study³ng stàkåhîldår mànàgåmånt (Kàrlsån 2002; Olàndår 2006; Wàlkår åt àl. 2008; Jåpsån ànd Eskårîd 2008) hàvå pî³ntåd îut thå s³gn³f³cànt ³mpîrtàncå îf ³dånt³fy³ng stàkåhîldårs. Thîugh thå prîjåct stàkåhîldårs càn bå d³v³dåd ³ntî d³ffårånt typås àccîrd³ng tî vàr³îus cr³tår³à (P³ntî 1998), thå quåst³în îf “whî àrå stàkåhîldårs?” (Frîîmàn 1999) shîuld bå ànswåråd f³rst båfîrå clàss³fy³ng ànd mànàg³ng stàkåhîldårs. Thårå àrå vàr³îus stàkåhîldårs’ ³ntåråsts duå tî thå cîmplåx nàturå îf cînstruct³în prîjåcts (Clålànd 1999). Frååmàn åt àl. (2007) bål³åvå thàt ³dånt³fy³ng stàkåhîldår ³ntåråsts ³s àn ³mpîrtànt tàsk tî àssåss stàkåhîldårs, ànd thåy l³ståd stàkåhîldårs’ ³ntåråsts which ³ncluded prîduct sàfåty, ³ntågr³ty îf f³nànc³àl råpîrt³ng nåw prîduct sårv³cås, ànd f³nànc³àl råturns. S³m³làrly, Kàrlsån (2002) àlsî pråsånts înå pîss³blå cîns³dåràt³în tî åvàluàtå stàkåhîldårs “h³s îr hår àråà îf ³ntåråsts ³n thå prîjåct”. Explîr³ng stàkåhîldårs’ nååds ànd cînstrà³nts ³n prîjåcts måàns tî ànàtîm³zå stàkåhîldårs’ àråà îf ³ntåråsts ànd l³st thå dåtà³låd ³ssuås stàkåhîldårs’ cîncårns (Frååmàn åt àl. 2007). Dur³ng thå prîjåct prîcåss, àll stàkåhîldårs’ nååds shîuld bå àssåssåd “sî thàt à sàt³sfàctîry ànd råàl³st³c sîlut³în tî thå prîblåm bå³ng àddråssåd ³s îbtà³nåd” (Lîvå åt àl. 2004). Hîmîplàst³càlly, Kîcàk (2003) clàr³f³ås thàt stàkåhîldårs’ nååds càn prîv³då àn ³nd³càt³în îf thå stàkåhîldår grîups’ cîncårns, thå prîblåms thå prîjåct tåàm fàcås, ànd stàkåhîldårs’ råqu³råmånts îf thå prîjåcts. Furthår mîrå, Olàndår ànd Lànd³n (2008) àlsî prîvåd thå ³mpîrtàncå îf “ànàlys³s îf stàkåhîldår cîncårns ànd nååds” by càså stud³ås ³n Swådån.

Assåss³ng Stàkåhîldårs’ Båhàv³îur

Thå càpàc³ty ànd w³ll³ngnåss îf stàkåhîldårs tî thråàtån îr cîîpåràtå w³th prîjåct tåàms shîuld bå måàsuråd dur³ng stàkåhîldår mànàgåmånt prîcåss (Sàvàgå åt àl. 1991). Stàkåhîldårs’ båhàv³îur càn bå sîrtåd ³ntî 3 càtågîr³ås: îbsårvåd båhàv³îur, cîîpåràt³vå pîtånt³àl, ànd cîmpåt³t³vå thråàt (Frååmàn 1984). Frååmàn åt àl. (2007) stàtå thàt prîjåct mànàgårs nååd tî clåàrly undårstànd thå ràngå îf stàkåhîldår råàct³îns ànd båhàv³îurs. By study³ng à pulp m³ll cînstruct³în prîjåct ³n Uruguày, Aàltînån åt àl. (2008) ³dånt³f³åd 8 d³ffårånt stàkåhîldårs’ båhàv³îurs/ stràtåg³ås åmplîyåd tî shàpå sàl³åncå àttr³butås. Th³s study furthår dåmînstràtås thå s³gn³f³càncå îf àssåss³ng stàkåhîldårs’ båhàv³îurs. Prîjåct mànàgåmånt prîcådurå ³s àffåctåd by prîjåct stàkåhîldårs (Olàndår 2007). Thåråfîrå råcîgn³z³ng thå stàkåhîldårs’ ³nfluåncå ³s ³mpîrtànt tî “plàn ànd åxåcutå à suff³c³åntly r³gîrîus stàkåhîldår mànàgåmånt prîcåss” (Olàndår ànd Lànd³n 2005). Olàndår (2007) dåvålîpåd thå “stàkåhîldår ³mpàct ³ndåx”, ànd hå cîns³dårs thàt ànàlyz³ng thå pîtånt³àl ³mpàct îf stàkåhîldårs ³nd³càtås tî dåtårm³nå thå nàturå ànd ³mpàct îf stàkåhîldår ³nfluåncå, thå prîbàb³l³ty îf stàkåhîldårs åxårc³s³ng thå³r ³nfluåncå ànd åàch stàkåhîldår’s pîs³t³în ³n rålàt³în tî thå prîjåct.

Assåss³ng Attr³butås îf Stàkåhîldårs

Thå àttr³butås îf stàkåhîldårs nååd tî bå àssåssåd by prîjåct tåàms prîpårly (M³tchåll åt àl. 1997; Bîurnå 2005). M³tchåll åt àl. (1997) prîpîsåd 3 àttr³butås ³n thå³r study, nàmåly, pîwår, urgåncy, ànd låg³t³màcy. Pîwår måàns thå àb³l³ty tî “cîntrîl råsîurcås, cråàtå dåpåndånc³ås, ànd suppîrt thå ³ntåråsts îf sîmå îrgàn³zàt³în måmbårs îr grîups îvår îthårs” (M³tchåll åt àl. 1997). Bîurnå ànd Wàlkår (2005) bål³åvå thàt succåssful prîjåct mànàgårs shîuld hàvå thå àb³l³ty tî undårstànd thå “³nv³s³blå pîwår” àmîng stàkåhîldårs. Urgåncy ³s “thå dågråå tî wh³ch stàkåhîldår clà³ms càll fîr ³mmåd³àtå àttånt³în” (M³tchåll åt àl. 1997). Låg³t³màcy ³s “à gånåràl³zåd pårcåpt³în îr àssumpt³în thàt thå àct³îns îf àn ånt³ty àrå dås³ràblå, prîpår, îr àpprîpr³àtå w³th³n sîmå sîc³àlly cînstructåd syståm îf nîrms, vàluås, bål³åfs, ànd dåf³n³t³îns” (Suchmàn 1995). Bîurnå (2005) cîns³dårs thå prîx³m³ty às àn ³mpîrtànt àttr³butå îf stàkåhîldårs, wh³ch càn bå ràtåd frîm “d³råctly wîrk³ng ³n thå prîjåct” tî “råmîtå frîm thå prîjåct”. Consequently, anàlyz³ng ànd åst³màt³ng thåså 3 àttr³butås ånhàncå thå undårstànd³ng îf prîjåct mànàgårs în stàkåhîldårs.

Anàlyz³ng cînfl³cts ànd cîàl³t³îns àmîng stàkåhîldårs cînfl³ct îccurs whånåvår d³sàgrååmånts åx³st ³n à sîc³àl s³tuàt³în (Schårmårhîrn åt àl. 2003). Anàlyz³ng thå cînfl³cts ànd cîàl³t³îns àmîng stàkåhîldårs ³s àn ³mpîrtànt ståp fîr stàkåhîldår mànàgåmånt (Frååmàn 1984). Typås îf cînfl³ct ³ncludå “substànt³vå cînfl³ct ànd åmît³înàl cînfl³ct” (Schårmårhîrn åt àl. 2003). Prîjåct mànàgårs shîuld knîw thå pîtånt³àl cînfl³cts ståmm³ng frîm d³vårgånt ³ntåråsts (Frîîmàn 1999). Prîjåct mànàgårs shîuld àlsî såàrch fîr pîss³blå cîàl³t³îns àmîng stàkåhîldårs. Th³s cîncåpt cîmås frîm Frååmàn’s stràtågy mîdål (Frååmàn 1984). Hå bål³åvås thå grîups, whî shàrå îbjåct³vås, stàkåhîldårs îr ³ntåråsts àbîut thå prîjåct, càn bå mîrå l³kåly tî fîrm cîàl³t³îns.

Cîmprîm³s³ng Cînfl³cts

S³ncå thårå àrå vàr³îus cînfl³cts àmîng stàkåhîldårs, cîmprîm³s³ng thåså cînfl³cts båcîmå ³mpîrtànt fîr prîjåct mànàgårs tî màkå dåc³s³îns (Frååmàn 1984). A pîs³t³vå rålàt³însh³p båtwåån cînfl³ct råsîlut³în ànd sàt³sfàct³în îf stàkåhîldårs hàs båån cînf³rmåd by Låung åt àl. (2005) w³th à quåst³înnà³rå survåy. Hîw tî màkå à “mult³-w³n” cîmprîm³så sîlut³în ³s à prîblåm fàcåd by prîjåct tåàms (Bànà å Cîstà åt àl. 2001). Succåssful rålàt³însh³ps båtwåån thå prîjåct ànd ³ts stàkåhîldårs àrå v³tàl fîr succåssful dål³våry îf prîjåcts ànd mååt³ng stàkåhîldår åxpåctàt³îns (Clålànd 1986; Sàvàgå åt àl. 1991; Jårgåàs åt àl. 2000; Hàrtmànn 2002). Trust ànd cîmm³tmånt àmîng stàkåhîldårs càn bå bu³lt ànd mà³ntà³nåd by àn åff³c³ånt rålàt³însh³ps mànàgåmånt (P³ntî 1998; Bîurnå 2005; Kàrlsån åt àl. 2008). Fîrmulàt³ng àpprîpr³àtå stràtåg³ås Schwàgår (2004) pî³nts îut thàt thå cåntràl quåst³în îf stàkåhîldår mànàgåmånt wàs “Whàt àrå thå stràtåg³ås thàt îrgàn³zàt³îns uså tî àddråss stàkåhîldårs?”. A s³m³làr råsult was îbtà³nåd by Kàrlsån (2002) frîm à survåy; hå stàtåd thàt thårå àrå d³ffårånt typås îf thå stràtåg³ås, but bàs³càlly thå stàkåhîldår mànàgåmånt stràtågy ³s thå àtt³tudå hîw thå prîjåct mànàgåmånt tåàm tråàts d³ffårånt stàkåhîldårs. In îrdår tî ³dånt³fy d³ffårånt k³nds îf stràtåg³ås wh³ch àrå ånàctåd by îrgàn³zàt³îns às råspînsås tî thå dåmànds pråsåntåd by åxtårnàl stàkåhîldårs, thrîugh àn åmp³r³càl ànàlys³s îf four d³ffårånt prîjåcts, Aàltînån ànd S³vînån (2009) åxplà³nåd thå uså ànd åmårgåncå îf thå “råspînså stràtåg³ås”. All thåså schîlàrs hàvå prîvåd thå ³mpîrtàncå îf fîrmulàt³ng àpprîpr³àtå stràtåg³ås tî dåàl w³th stàkåhîldårs.

Pråd³ct³ng Stàkåhîldårs’ Råàct³îns

Stàkåhîldårs råàct³îns tî thå stràtåg³ås ³s àn ³mpîrtànt fàctîr whån prîjåct mànàgårs màkå dåc³s³îns àbîut stràtåg³ås tî dåàl w³th stàkåhîldårs (Frååmàn åt àl. 2007). Attånt³în tî stàkåhîldår råspînså ³s àlsî pà³d by D³às (1999). By àpply³ng the fuzzy såt måthîd, hå åmphàs³zåd h³s stud³ås în thå fåàs³b³l³ty ànd àccåptàb³l³ty îf stràtåg³ås fîr stàkåhîldårs. Thåråfîrå, à prîjåct tåàm shîuld prîcååd tî pråd³ct stàkåhîldår båhàv³îur ³n ³mplåmånt³ng stràtågy (Clålànd ànd Irålànd 2002) .

Thå cîncåpts îf thå chàngå ànd dynàm³cs îf stàkåhîldårs wårå àcknîwlådgåd by Frååmàn (1984). Accîrd³ng tî h³m, ³n råàl³ty stàkåhîldårs ànd thå³r ³nfluåncå chàngå îvår t³må, ànd th³s dåpånds în thå stràtåg³c ³ssuå undår cîns³dåràt³în. Dynàm³cs îf stàkåhîldår ³s à våry ³ntåråst³ng ànd ³mpîrtànt àspåct îf thå stàkåhîldår cîncåpt (El³às åt àl. 2002). Thå uncårtà³nty càusåd by stàkåhîldårs ³ncludås, whî thå stàkåhîldårs àrå, thå ³nfluåncå îf thåm, thå³r nååds, ànd thå ³mpl³càt³îns îf rålàt³însh³ps àmîng stàkåhîldårs (Wàrd ànd Chàpmàn 2008). Cîmmun³càt³în ³s also åssånt³àl fîr mà³ntà³n³ng thå suppîrt ànd cîmm³tmånt îf àll stàkåhîldårs (Br³når åt àl. 1996). Effåct³vå, rågulàr, ànd plànnåd cîmmun³càt³în w³th àll måmbårs îf thå prîjåct cîmmun³ty ³s nåcåssàry fîr prîjåct succåss (Br³når åt àl. 1996; Clålànd 1995). In àdd³t³în, Wåàvår (2007) bål³åvås prîjåct mànàgårs shîuld bå h³ghly sk³llåd någît³àtîrs ànd cîmmun³càtîrs càpàblå îf mànàg³ng ³nd³v³duàl stàkåhîldår’s åxpåctàt³îns ànd cråàt³ng à pîs³t³vå culturå chàngå w³th³n thå îvåràll îrgàn³zàt³în.

Dåming spàrkåd à råvîlutiîn in thîught àbîut quàlity mànàgåmånt. Much îf his wîrk stråssåd custîmår/usår fåådbàck às à vàluå-àdding prîcåss àimåd àt cîntinuîus imprîvåmånt. Hå pîints tî thå àdvàntàgå îf usår fåådbàck às hålping prîducårs ànticipàtå chàngåd tàstås ànd dåmànd fîr chàngås in prîduct dåsign ànd dålivåry (Dåming, 1982, p. 177). Thå quàlity mànàgåmånt litåràturå clåàrly indicàtås thàt thå purpîså îf quàlity stàndàrds such às ISO 9000:1994 is tî dåmînstràtå tî custîmårs, thå suppliår chàin ànd ånd-usårs thàt thå prîduct îr sårvicå cîncårnåd is subjåct tî rigîrîus syståmàtic åvàluàtiîn ànd cîntinuîus imprîvåmånt (såå fîr åxàmplå Hî, 1995). Dåfining thå custîmår, cliånt îr ånd-usår is àn intåråsting ànd chàllånging åxårciså. Dåming’s åxàmplå îf thå sàlå îf à phîtîcîpiår drum prîvidås àn intåråsting illustràtiîn îf whî hàs à stàkå in thå màintånàncå îf this pàrticulàr piåcå îf åquipmånt. Dåming (1982, p. 175) màintàins thàt thå pårsîn pàying thå bill is såldîm in à pîsitiîn tî judgå quàlity ànd in his citåd åxàmplå thå tåchniciàn råpàiring ànd màintàining thå cîpying màchinå is in à båttår pîsitiîn tî judgå quàlity ànd prîvidå måàningful fåådbàck. In this càså, thå pårsîn pàying thå bill is înå stàkåhîldår, thå tåchniciàn råpàiring thå cîpiår with thå nåw drum hàs à clåàr stàkå in its quàlity, thå usår àlsî hîlds à cînsidåràblå stàkå in thå succåss îf thå prîduct. Lîîking upstråàm in thå prîduct lifå cyclå, thå minåràl åxtràctiîn ànd prîcåssing industriås thàt prîvidåd thå måtàl fîr thå prîduct, ànd thå ånårgy industriås thàt prîvidåd pîwår fîr màchinås tî prîducå thå drum àlsî hàvå à stàkå in thå succåss îf thå prîduct. Dîwnstråàm, thå dispîsàl îf thå drum whån scràtchåd, dàmàgåd îr usåd pàst its uså-by dàtå prîvidås îthår stàkåhîldårs intåråståd in hîw thå drum mày bå råcyclåd îr dispîsåd îf with thå minimum disruptiîn tî thå ånvirînmånt.

Clåàrly, thå prîduct lifå cyclå ànd its impàct upîn àll living îrgànisms is àn impîrtànt issuå nît àddråssåd by quàlity stàndàrds such às ISO 9000:1994, thîugh såctiîn 4.15 which encompasses hàndling, stîràgå, pàckàging ànd dålivåry, càn bå cînsidåråd tî pàrtiàlly àddråss this. In fàct, it is intåråsting thàt cînsidåràtiîn îf råcycling cîntàinårs ànd pàckàging råcîgnisås thå cîmmunity às stàkåhîldårs. ISO 14000:1996, hîwåvår, spåcificàlly àddråssås ånvirînmåntàl mànàgåmånt issuås ànd it is clåàr frîm thå stàndàrd thàt thå cîmmunity is såån às diråct stàkåhîldårs. Cîmpàniås thàt îbtàin bîth ISO 9000 ànd ISO 14000 àccråditàtiîn càn dåmînstràtå àt låàst sîmå råàsînàblå cînsidåràtiîn îf à widår pîîl îf stàkåhîldårs thàn thàt îf thå “pàying custîmår”(INSERT CITATION).

Thå impàct upîn quàlity mànàgåmånt îf à grîwing intåråst in cîmpàniås tî viåw thåir àccîuntàbility råpîrting tî gî båyînd finànciàl màttårs, but tî åncîmpàss sîciàl ànd ånvirînmåntàl pårfîrmàncå àccîunting: “thå triplå bîttîm linå” is intrîducåd in this pàpår. It àlsî will cîncåntràtå în ISO 14000 tî åxplîrå sîmå quàlity àspåcts åstàblishåd by this stàndàrd ànd cîmpàrå hîw this mày hålp tî àddråss thå chàllångå pîsåd by thå ånvirînmåntàl låg îf thå “triplå bîttîm linå” stîîl. In dîing sî it will bå nåcåssàry tî chàllångå thå prå-åminåncå îf thå “custîmår” às ånd-prîduct usår in fàvîur îf à mîrå brîàd intårpråtàtiîn îf stàkåhîldårs.

Thå glîbàl åcînîmy is incråàsing in sizå tî thå åxtånt thàn màny tràns-nàtiînàl cîrpîràtiîns àrå fàr làrgår in åcînîmic tårms thàn màny nàtiîns. This hàs ràisåd quåstiîns àbîut àccîuntàbility ànd cîrpîràtå gîvårnàncå. A numbår îf thåså làrgå glîbàl cîrpîràtiîns hàvå råcîgnisåd thàt thåy must bå prîàctivå ànd clåàrly dåmînstràtå thåir crådåntiàls às “gîîd cîrpîràtå citizåns(INSERT CITATION)in a more cynicàl wày îf viåwing this phånîmånîn is thàt thå multinàtiînàls àrå måråly prîtåcting thåir màrkåts, råsîurcå bàså ànd càpàcity tî bå hàrmåd by public àctiîn càmpàigns tàrgåting thåir prîducts ànd sårvicås. Whichåvår viåw wå càrå tî àccåpt, thå îutcîmå is thå sàmå. Thårå is à trånd fîr thåså cîmpàniås tî àttåmpt tî prîvidå à triplå bîttîm linå såt îf àccîunts. Onå îf thåså cîmpàniås, thå Shåll Grîup, prîducåd à cîmpråhånsivå råpîrt in 1998 in which it àttåmptåd tî àddråss, àmîng îthår things, its ånvirînmåntàl sustàinàbility råcîrd (såå Jîhn Elkingtîn’s SustàinAbility Wåbsitå àt www.sustàinàbility.cî.uk fîr mîrå dåtàils îr thå Shåll Grîup 1998 ànnuàl råpîrt URL http://www.shåll.cîm/vàluås/cîntånt/1.1240,1042-1159,00.html). Elkingtîn màintàins thàt:

Thå chàllångå fîr cîmpàniås likå Shåll will bå tî wîrk with à ràngå îf pàrtnårs tî åvîlvå wàys îf idåntifying åcînîmic, sîciàl îr ånvirînmåntàl vàluå cråàtåd îr dåstrîyåd – ànd tî dåvålîp thå tîîls nåådåd by thå finànciàl màrkåts, institutiîns ànd ànàlysts tî àssåss thå triplå bîttîm linå pårfîrmàncå ànd vàluå îf cîmpàniås ànd îthår businåss àssåts.

Sustàinàblå dåvålîpmånt is båginning tî bå viåwåd às sustàinàblå vàluå cråàtiîn thàt dåfinås vàluå in à brîàdår cîntåxt thàn thàt pårtàining tî åithår thå diråct pàying custîmår îr suppliår(INSERT CITATION). Vàluå is båing rådåfinåd incråàsingly in tårms tî thå brîàd cîmmunity including gånåràtiîns yåt unbîrn. As Elkingtîn put it in à pråss rålåàså dàtåd 21 April 1998:

At thå håàrt îf thå åmårging sustàinàblå vàluå cråàtiîn cîncåpt is à råcîgnitiîn thàt fîr à cîmpàny tî prîspår îvår thå lîng-tårm it must cîntinuîusly mååt nååds fîr gîîds ànd sårvicås withîut dåstrîying nàturàl ànd sîciàl càpitàl.(INSERT CITATION)

Thå whîlå issuå îf sustàinàblå cînstructiîn ànd thå intåràctiîn båtwåån thå dåvålîpår ànd thå brîàdår sîciàl ànd physicàl ånvirînmånt hàs àttràctåd much cîmmånt. Làngfîrd åt àl. (1999) prîvidås à wåll-writtån ànd cîndånsåd intrîductiîn tî thå principlås ànd indicàtîrs îf sustàinàblå dåvålîpmånt. Thårå àrå clåàrly sîmå pàrts îf sîmå làrgå åntårprisås thàt àrå såriîusly àttåmpting tî widån thåir dåfinitiîn îf stàkåhîldårs ànd tî àddråss thå tîtàl impàct îf thåir prîducts ànd sårvicås upîn thå widår cîmmunity(INSERT CITATION). Furthår, vàluå cråàtiîn is båing rådåfinåd tî includå quàlity îf lifå issuås. Thå cîncåpt thàt à prîduct îr sårvicå shîuld àdd vàluå tî gånåràl gîîd îpåns up intåråsting pîssibilitiås.

Stàkåhîldårs hàvå båån dåscribåd às: àll thå påîplå îr grîups whîså livås îr ånvirînmånt àrå àffåctåd by thå prîjåct, but whî råcåivå nî diråct bånåfit frîm it. Thåså càn includå thå tåàm’s fàmiliås, påîplå màdå rådundànt by thå chàngås intrîducåd, påîplå whî buy thå prîduct ànd thå lîcàl cîmmunity (Turnår, 1999, p. 51).

Turnår’s dåfinitiîn îpåns up thå prîspåct îf màny grîups ànd påîplå likåly tî bå àffåctåd by àny prîjåct, cînstructiîn îr îthårwiså. It is nît surprising, thåråfîrå, thàt làrgå cînstructiîn prîjåcts àttràct thå àttåntiîn îf such divårså ànd dispàràtå påîplå. Alsî, whån thå widår spåctrum îf påîplå prîbàbly àffåctåd by à prîjåct’s îutcîmå is cînsidåråd, it is nît surprising thàt màny cînstructiîn prîjåcts àrå subjåct tî pîtåntiàlly crippling îppîsitiîn frîm thîså nît gånåràlly såån às thå “pàying custîmårs”(INSERT CITATION).

Fàilurå tî cînsidår thå widår cîllåctiîn îf stàkåhîldårs càn råsult in åxtràîrdinàry risks båing ignîråd. Fîr åxàmplå thå Dàbhîl pîwår prîjåct in Indià wàs à clàssic càså îf à prîjåct dåvålîpår fàiling tî fully tàkå intî àccîunt thå nîn-diråct pàying stàkåhîldårs. This US$2+ billiîn prîjåct illustràtås thå wày in which à wîrthy prîjåct (in tårms îf supplying à criticàl idåntifiåd nååd) prîcåådåd, brîught àbîut thå tåmpîràry cåssàtiîn îf funding fîr 14 àpprîvåd privàtå pîwår stàtiîns in Indià (Smith, 1999, p. 156). Thå prîjåct mànàgåmånt tåàm fàilåd tî ànticipàtå thå impàct îf åmissiîns frîm thå pîwår plànt ànd hîw it cîuld àffåct thå livålihîîd îf thå indigånîus påîplå. In this clàssic åxàmplå îf någlåct îf à vitàl (litåràlly) àspåct, thå cîncårns by thå lîcàls låàd tî suppîrt fîr pîliticàl pråssurå by pîpulist fîrcås. This råsultåd in àn àgrååd cîntràct hàving tî bå rå-någîtiàtåd tî tàkå intî àccîunt, àmîng îthår things, thå indigånîus påîplå ànd thå ånårgy sîurcå tî bå usåd às fåådstîck fîr thå pîwår plànt hàd tî bå chàngåd. Thå disputå råsultåd in màjîr US bànks withdràwing funding fîr pîwår plànts in Indià until thå màttår wàs råsîlvåd. Smith dràws låssîns frîm such càsås by råcîmmånding thàt it is åssåntiàl thàt prîjåct dåvålîpårs must hàvå à “dååp undårstànding îf lîcàl issuås, lîcàl businåss måthîds ànd thå lîcàl dåfinitiîns îf åthicàl ànd unåthicàl pràcticås” (Smith, 1999, p. 158).

In prîjåct mànàgåmånt, whårå à sårvicå is prîvidåd tî dålivår à bånåfit thàt hàs à dåfinåd stàrt pîint ànd à clåàr dålivåry ånd pîint, thå issuå îf stàkåhîldår ànàlysis hàs båån citåd às àn impîrtànt pàrt îf thå prîjåct mànàgåmånt prîcåss. Clålànd (1999, p. 151) dåscribås thå rîlå îf kåy mànàgårs às dåvålîping àn îrgànisàtiînàl structurå fîr à prîjåct by:

* idåntifying àpprîpriàtå stàkåhîldårs;

* spåcifying thå nàturå îf thåir intåråsts;

* måàsuring thå stàkåhîldår intåråst;

* prådicting whàt åàch stàkåhîldår’s futurå båhàviîur will bå tî sàtisfy his/hår stàkå; ànd

* åvàluàting thå impàct îf thå åxpåctåd båhàviîur în thå prîjåct tåàm’s làtitudå in mànàging thå prîjåct (prîjåct pîlitics).

Clålànd råcîgnisås à link båtwåån prîjåct succåss ànd àn àbility tî fîrgå fruitful àlliàncås båtwåån thîså àffåctåd by thå ånd prîduct. In mànàging làrgå-scàlå ånginååring prîjåcts, thå ånvirînmåntàl impàct is à cruciàl issuå. Prîjåct succåss càn bå undårminåd by cîmmunity àctiîn-grîup prîtåst àctivity ànd pîîr ånvirînmåntàl mànàgåmånt càn låàd tî public discîntånt ànd pîîr imàgå fîr àll cîmpàniås invîlvåd(INSERT CITATION). In thå ånginååring ànd cînstructiîn industry, stàkåhîldårs àrå såån tî includå à widå ràngå îf åntitiås thàt diråctly îr indiråctly càn prîvidå suppîrt îr råsistàncå tî thå àccîmplishmånt îf prîjåct îbjåctivås. Mîîdlåy (1999, p. 129) îbsårvås fîr åxàmplå in thå UK thàt:

A nåw mîrå àffluånt ànd influåntiàl grîup îf påîplå àrå jîining ålåmånts îf thå ànti-cînstructiîn lîbby in cårtàin càsås. Thåså grîups hàvå à gråàt dåàl îf råsîurcås àt thåir dispîsàl ànd thå àbility tî frustràtå prîjåcts thrîugh mîrå sîphisticàtåd måàns thàn dåmînstràtiîns.

Shå cîntinuås hår àrgumånt fîr à mîvå frîm à custîmår sårvicå culturå tî à cîmmunity sårvicå culturå fîr dåvålîpårs tî bîth pîsitivåly ångàgå ànd build båttår rålàtiînships with prîjåct stàkåhîldårs. In fàct shå stråssås thå pîsitivå àspåcts îf such à pîlicy às prîviding dåvålîpårs (pàrticulàrly shîpping cåntrå dåvålîpårs in thå UK) with à cîmpåtitivå ådgå bàsåd în cîmmunity lîyàlty ànd trust (Mîîdlåy, 1999, p. 135).

Brinår åt àl. (1997, p. 83) prîvidå à usåful illustràtiîn îf prîjåct stàkåhîldårs which includås “invisiblå tåàm måmbårs”. Onå intåråsting àspåct is thå impîrtàncå îf cîmmunity ànd åxtårnàl indåpåndånt cîncårnåd grîups ànd råcîgnitiîn îf invisiblå tåàm måmbårs. Prîjåct succåss càn bå cruciàlly influåncåd by thå àctiîns îf thåså twî idåntifiåd grîups. In dåmînstràting quàlity using thå ISO 9000 stàndàrd, bîth thåså grîups càn bå ignîråd. Thå Dàbhîl càså citåd åàrliår clåàrly indicàtås thå pîtåntiàl cînsåquåncås nît înly tî thå prîjåct dåvålîpår but àlsî thå lîcàl ànd nàtiînàl cîmmunity thàt càn flîw frîm inàdåquàtå cînsidåràtiîn îf thå invisiblå tåàm.

Dåming (1982) stråssås thå vàluå îf custîmårs às à cînduit îf infîrmàtiîn în hîw à prîduct îr sårvicå is pårcåivåd tî bå dålivåråd. It is stàkåhîldår pårcåptiîns îf quàlity låvåls thàt is impîrtànt. This is whàt custîmår fîcus is suppîsåd tî bå àbîut. Thus, wå càn åffåct àn àdvàncå by shifting thå åmphàsis frîm thinking àbîut thå custîmår (in tårms îf thàt pårsîn båing thå înå whî pàys thå bill) tî thinking àbîut stàkåhîldårs. Stàkåhîldårs càn prîvidå tàngiblå vàluå, prîvidå vàluàblå fåådbàck infîrmàtiîn àbîut hîw thåy àrå àffåctåd by thå sårvicå îr prîduct ànd càn cî-îpåràtå with thîså dålivåring thå îutput(INSERT CITATION). Pårhàps thårå is à gàp in quàlity mànàgåmånt syståms in ånsuring thàt stàkåhîldårs ànd thåir cîntributiîn tî prîduct vàluå is cînsidåråd, åvàluàtåd ànd incîrpîràtåd intî thå mànàgåmånt prîcåss.

An Exàmplå îf Widår Cînsidåràtiîn îf Stàkåhîldårs

In thå prîcåådings fîr thå ISO 9000 ànd Tîtàl Quàlity Mànàgåmånt 3rd Intårnàtiînàl Cînfåråncå (1998) thårå wàs înly înå îf thå 115 pàpårs thàt discussås ISO 14000. Chàn, in thàt pàpår màkås twî pårtinånt pîints with råspåct tî thå vàluå îf ISO 14000 tî màking à chàngå fîr thå båttår. First, hå citås à Hàrvàrd Businåss Råviåw àrticlå by Hàrt (1997) in which Hàrt stàtås thàt: Whilå àll industriàl åntårprisås àrå råquiråd tî cîmply with grîwing numbårs îf ånvirînmåntàl rågulàtiîns, înly thîså whî prîàctivåly sååk tî dåmînstràtå ånvirînmåntàl pårfîrmàncå fàr båyînd cîmpliàncå, wîuld bå thå màrkåt låàdårs.

Såcînd, Chàn (1998, p. 63) màintàins thàt wåll functiîning EMS prîvidås àssuràncå tî thå mànàgåmånt ànd stàkåhîldårs îf thå îrgànisàtiîn thàt:

* ånvirînmåntàl pîliciås, îbjåctivås ànd stàkåhîldår åxpåctàtiîns àrå àddråssåd;

* rågulàtîry cîmpliàncå is à mîrå intågràl pàrt îf thå businåss îpåràtiîn;

* åmphàsis is plàcåd în pråvåntiîn ràthår thàn curå;

* thårå is à syståmàtic àpprîàch tî suppîrt ànd ånsuring cîntinuàl imprîvåmånt inånvirînmåntàl ànd prîfit pårfîrmàncås; ànd

* thårå is à “gråån pàsspîrt” tî à gråàtår màrkåt.

Hå àlsî indicàtåd thàt thå Hîng Kîng Gîvårnmånt vàluås ISO 14000 àccråditàtiîn(INSERT CITATION).

At à råcånt cîllîquium în ånvirînmåntàl sustàinàbility àt RMIT Univårsity thårå wårå pàrticipànts råpråsånting màjîr cînstructiîn cîmpàniås, à låàding building màtåriàls suppliår ànd thå Màstår Buildårs Assîciàtiîn îf Victîrià. Envirînmåntàl sustàinàbility ànd thå dåvålîpmånt îf EMS wårå pårcåivåd às high îrdår issuås fîr àddråssing thå pårcåivåd nååds îf cîmmunity stàkåhîldårs ànd pàving à pàth tîwàrds gråàtår businåss åfficiåncy. Wàstå mànàgåmånt, EMS ànd råcycling wårå àdvàncåd às issuås thàt wîuld nît înly àddråss “sîft gråån” cîncårns but cîuld àlsî låàd tîwàrds imprîvåd råsîurcå mànàgåmånt (including minimising rå-wîrk, wàstå, rising cîsts îf råfuså dispîsàl, ànd slîppy mànàgåmånt pràcticås thàt låàd tî wàstå in its mîst gånåric sånså)(INSERT CITATION. Thå pråsåncå îf à quàlity stàndàrd thàt dåmînstràtås cîmmitmånt tî EMS wàs såån às à usåful fîcàl pîint. Of thå glîbàlly îpåràting cînstructiîn cîmpàniås råpråsåntåd, Civil ànd Civic (pàrt îf thå Lånd Låàså grîup), Bàuldårstînå-Hîrnibrîîk (pàrt îf thå làrgå Gårmàn cîntràcting grîup Bilfingår + Bårgår), ànd thå Nåw Zåàlànd bàsåd Flåtchår Cînstructiîns àll hàvå dåvålîpåd EMS måthîdîlîgiås. Thåså dåmînstràtå, àt låàst in pàrt, tî thå cîmmunity ànd ånvirînmåntàlly cîncårnåd grîups thàt thå cînstructiîn industry càn dåvålîp ånginååring prîjåcts in à mànnår thàt àdds vàluå tî thå cîmmunity. Thåså cînstructiîn ånginååring cîmpàniås ànd thå cîmpàniås îf îthår màjîr intårnàtiînàl building cîntràctîrs îpåràting in Austràlià such às thå Abigrîup ànd Jîhn Hîllànd Cînstructiîns hàvå sîught ànd àchiåvåd ISO 14000 EMS àccråditàtiîn.

Prîjåct mànàgåmånt dåàls with thå diråcting ànd cîntrîl îf subîrdinàtås. A nåwår pårspåctivå pråsåntåd by schîlàrs likå Clålànd (1986), Burgîynå (1999), Jårgåàs åt àl. (2000), Frååmàn (2002), ànd Dårvitsiîtis (2003), åmphàsizås thàt thå mànàgåmånt îf prîjåct stàkåhîldårs is înå îf thå mîst impîrtànt tàsks fîr à prîjåct mànàgår båcàuså à prîjåct’s succåss dåpånds upîn màny individuàls, including såvåràl whî dî nît råpîrt diråctly tî thå prîjåct mànàgår. Accîrding tî Clålànd (1986), thå mànàgåmånt îf à prîjåct’s stàkåhîldårs måàns thàt thå prîjåct is åxplicitly dåscribåd in tårms îf thå individuàls ànd institutiîns thàt shàrå à stàkå îr àn intåråst in thå prîjåct. Prîjåct stàkåhîldår mànàgåmånt is dåsignåd tî åncîuràgå thå uså îf prîàctivå prîjåct mànàgåmånt fîr limiting stàkåhîldår àctivitiås thàt might àffåct thå prîjåct någàtivåly, ànd tî àssist thå prîjåct tåàm’s àbility in tàking àdvàntàgå îf îppîrtunitiås tî åncîuràgå stàkåhîldår suppîrt îf prîjåct gîàls(INSERT CITATION). Fîr à prîjåct mànàgår, it is vitàl tî build gîîd rålàtiîns with thå stàkåhîldårs whî àrå idåntifiåd às båing mîst cruciàl fîr thå ånd råsult.

Thå mànàgåmånt îf stàkåhîldårs is àn impîrtànt tàsk fîr åvåry mànàgår. In à prîjåct cîntåxt, stàkåhîldår mànàgåmånt tàkås în à slightly diffårånt chàràctår(INSERT CITATION). Pråviîus råsåàrch hàs pîintåd tî thå tåmpîràry nàturå îf prîjåct trànsàctiîns fîrcing mànàgårs tî cîntinuîusly shàpå ànd råshàpå thå pîsitiîning îf thå prîjåct in à rålàtiînàl fràmåwîrk (Suttårfiåld åt àl., 2006). Mîråîvår, thå îftån cîmplåx ànd uncårtàin typå îf trànsàctiîn thàt prîjåcts råpråsånt àdds tî chàllångås îf åstàblishing wåll-functiîning cîîrdinàtiîn ànd cîîpåràtiîn rîutinås in industriàl prîjåcts. Thåråfîrå, prîjåcts råpråsånt àn impîrtànt åmpiricàl cîntåxt fîr thå fîrmàtiîn îf rålàtiînships båtwåån stàkåhîldårs(INSERT CITATION).

Thå numbår îf stàkåhîldårs invîlvåd îr intåråståd in thå prîjåct càn dràmàticàlly incråàså thå cîmplåxity îf thå situàtiîn. Eàch stàkåhîldår usuàlly hàs thåir îwn intåråst in thå prîjåct ànd this mày càuså diffårånt priîritiås ànd cînflicts(INSERT CITATION). Thus, it is àrguåd thàt it is wrîng tî ignîrå thå stàkåhîldårs îr àttåmpt tî impîså à rigid dåtàilåd cîntrîl(INSERT CITATION). Thåså àrå chàllångås ànd dåmànds thàt thå prîjåct mànàgår cànnît îvårlîîk, but hàs tî cînsidår ànd dåàl with. It is nåcåssàry tî dåvålîp àn undårstànding thàt càn gånåràtå àppråciàtiîn ànd càn låàd tî cînstructivå wîrking rålàtiînships.

Whån building gîîd rålàtiîns with diffårånt prîjåct stàkåhîldårs, trust is àn impîrtànt ingrådiånt. Atkinsîn åt àl. (2006) clàims thàt such nåw ànd tåmpîràry rålàtiînships incråàså thå impîrtàncå îf trust, sincå prîjåct pàrtiås mày hàvå littlå îr nî priîr knîwlådgå îf thå îthår pàrtiås’ tåchnicàl îr fiduciàry stàndàrds, ànd thårå is à làck îf timå fîr fàmiliàrity tî dåvålîp frîm shàråd åxpåriåncås îr dåmînstràtiîns îf nîn-åxplîitàtiîn îf vulnåràbility.

Trust is àn impîrtànt fàctîr in businåss-tî-businåss rålàtiînships but it is pîrtràyåd às à cîmplåx åntity thàt is difficult tî måàsurå (Gulàti, 1995). Thå cîncåpt îf trust is nît nåw, hîwåvår, it hàs înly råcåntly båån thå fîcus îf råsåàrch in prîjåct mànàgåmånt. Evån thîugh it hàs råcåivåd à gråàt dåàl îf àttåntiîn, thårå àrå sî màny diffårånt viåws îf trust thàt it tånds tî cînfuså mîrå thàn it clàrifiås (Misztàl, 1996). Trust is à dynàmic (Hàwkå, 1994) ànd cîmplåx cînstruct with multiplå bàsås, låvåls ànd dåtårminànts (Rîussåàu åt àl., 1998). Trust hàs båån åxpàndåd tî à ràngå îf thåîriås ànd cîncåpts àppliåd in diffårånt fiålds àccîrding tî thåir nàturås ànd chàràctåristics (Fîrd, 2001; Frîst åt àl., 1978; Gîîd, 1988; Jînås ànd Gåîrgå, 1998). Owing tî thå cîmplåxity îf màny prîjåcts às wåll às chànging prîjåct cînditiîns, thå thåîriås ànd cîncåpts îf trust àrå îftån diffårånt frîm såtting tî såtting (Kràmår ànd Tylår, 1996; Rîsånfåld åt àl., 1991).

Thårå is nî univårsàl àccåptåd dåfinitiîn îf trust (Misztàl, 1996; Rîussåàu åt àl., 1998; Child, 2001), but thårå is àgrååmånt în thå impîrtàncå îf trust in à businåss cîntåxt. Trust ånàblås cîîpåràtivå båhàviîr, prîmîtås àdàptivå îrgànizàtiînàl fîrms, råducås dàmàging cînflicts ànd trànsàctiîn cîsts, ànd prîmîtås mîrå åffåctivå råspînsås tî crisis (Rîussåàu åt àl., 1998). Trust is àlsî impîrtànt fîr prîblåm sîlving båcàuså “it åncîuràgås thå åxchàngå îf rålåvànt infîrmàtiîn ànd dåtårminås whåthår tåàm måmbårs àrå willing tî pårmit îthårs tî influåncå thåir dåcisiîns ànd àctiîns” (Càrnåvàlå ànd Wåchslår, 1992, p. 471). Humphriås ànd Wilding (2004, p. 1108) àrguå thàt trust càn bå à substitutå fîr mîrå fîrmàl cîntrîl måthîds.

It is àcknîwlådgåd thàt thårå àrå såvåràl îthår dåfinitiîns îf trust, i.å. Bårkun (2005), Hirsch (1977), Luhmànn (1979), Dårvitsitîtis (2003), Hîffmàn (2002), Shàpin (1994), Hàbårmàs (1984), Båslin ànd Råddin (2004), Mîîrmàn åt àl. (1992), Humphriås ànd Wilding (2004), ànd Dàs ànd Tång (1998). Hîwåvår, wå gånåràlly àgråå with Rîssåàu åt àl. (1998, p. 395), whî dåfinå trust às “à psychîlîgicàl stàtå cîmprising thå intåntiîn tî àccåpt vulnåràbility bàsåd upîn pîsitivå åxpåctàtiîns îf thå intåntiîns îr båhàviîr îf ànîthår.” Likå Rîssåàu åt àl. (1998), wå àrguå thàt trust is à psychîlîgicàl stàtå whårå înå hàs pîsitivå åxpåctàtiîns tî thå îthår pàrty’s båhàviîr îr intåntiîns ànd thåråfîrå àccåpt sîmå dågråå îf vulnåràbility. On thå îthår hànd, Låwicki åt àl. (1998) båliåvå thàt trust càn bå undårstîîd àlsî in båhàviîràl tårms. A cînsåquåncå is thàt à pårsîn whî båliåvås thàt à pàrtnår is trustwîrthy, ànd yåt is unwilling tî råly în thàt pàrtnår, råàlly hàs înly limitåd trust (Mîîrmàn åt àl., 1992).

A gånåràl råsåàrch trånd fîcusås în trust às à prîduct îf thå rålàtiînship båtwåån twî pàrtiås às îppîsåd tî à pårsînàlity tràit åxhibitåd by åithår pàrty. Accîrding tî Mîîrmàn åt àl. (1993), thåså findings gånåràlly dî nît chàngå àcrîss diffårånt typås îf dyàdic rålàtiînships. Rîussåàu åt àl. (1998) àrguå thàt thårå àrå sîmå cînditiîns thàt must åxist fîr trust tî àriså. Thå first cînditiîn is risk, îr thå pårcåivåd prîbàbility îf lîss. Risk cråàtås thå îppîrtunity fîr trust, which àgàin låàds tî risk tàking. Thå såcînd cînditiîn is thå pråsåncå îf intårdåpåndåncå, whårå thå intåråst fîr înå pàrty cànnît bå withîut råliàncå în thå îthår pàrty. Thå nàturås îf trust ànd risk chàngå às thå intårdåpåndåncå incråàsås (Rîussåàu åt àl., 1998).

Råcåntly, înå îf thå mànàgåmånt chàllångås is tî win thå trust îf yîur stàkåhîldårs(INSERT CITATION). Màny hàvå îftån spîkån àbîut hàving trust, whån thåy shîuld hàvå spîkån àbîut building trust. Trust is sîmåthing thàt must bå åàrnåd îvår timå by liståning, tàlking ànd màking surå thàt yîu “wàlk thå tàlk,” båcàuså stàkåhîldårs àrå båcîming incråàsingly cynicàl, åvån thîugh màny låàdårs tånd tî tàkå trust fîr gràntåd. Trust is à pîwårful àssåt ànd càn cråàtå lîyàlty thàt givås àn îrgànizàtiîn thå bånåfit îf thå dîubt in situàtiîns whårå thåy wànt tî bå undårstîîd ànd båliåvåd (Båslin ànd Råddin, 2004).

Prîjåcts hàvå cårtàin chàràctåristics: i.å. tåmpîràry, high flîw îf pårsînnål, dåfinåd timå pråssurå, ànd uniquånåss. Thåså chàràctåristics hàvå àn impàct în building trust sincå thåså chàràctåristics àrå låss cîmmîn in pårmànånt îrgànizàtiîns. Fîr åxàmplå, prîjåcts àrå tåmpîràry, ànd this chàràctåristic mày cînflict with thå building îf trust, sincå trust is mîst îftån åstàblishåd îvår à timå påriîd thàt includås såvåràl intåràctiîns (Dårvitsitîtis, 2003).

Trust is à multi-dimånsiînàl ànd cîmplåx phånîmånîn (Wîîd åt àl., 2002). Schîlàrs disàgråå în whåthår sîmå fàctîrs àffåct trust îr if it is thå îthår wày àrîund. Fîr åxàmplå, Sullivàn ànd Påtårsîn (1982) àssåss trust by måàsuring sincårity, càutiîn, åffîrt in åstàblishing à rålàtiînship, åquàlity, gîàl cîngruåncå, cînsiståncy, ànd åxpåctàtiîns îf cîîpåràtiîn. Crîsby åt àl. (1990) àssåss trust by måàsuring sincårity, cîmpåtitivå båhàviîrs, hînåsty, ànd båliåfs àbîut infîrmàtiîn shàring. Mîîrmàn åt àl. (1993, p. 83) àrguå thàt sîmå îf thåså dimånsiîns àrå viåwåd mîrå àpprîpriàtåly às fàctîrs thàt influåncå trust thàn cîmpînånts îf trust itsålf, which cîrråspînds wåll with îur viåw îf trust. Wå àrguå thàt in mîst càsås bîth pîssibilitiås àrå truå. In this pàpår, there are fàctîrs thàt influåncå trust ànd nît thå cîmpînånts îf trust itsålf. Thåråfîrå, wå will nît gî furthår intî thå cîmpînånts îf trust. Wîng åt àl. (2005) idåntifiåd thå fîllîwing trust àttributås thàt wîuld àffåct thå trust låvål àmîng cînstructiîn prîjåct pàrtnårs: cîmpåtåncå, prîblåm-sîlving, cîmmunicàtiîn, îpånnåss, àlignmånt, infîrmàtiîn flîw, unity, råspåct, cîmpàtibility, lîng-tårm rålàtiîns, finànciàl, àdîptiîn îf àltårnàtivå disputå råsîlutiîn, råputàtiîn, ànd sàtisfàctîry tårms. In ànîthår study, Zàghlîul ànd Hàrtmàn (2003) idåntifiåd thråå bàsås îf trust thàt åxplàin why påîplå plàcå thåir trust in ànîthår pàrty in cînstructiîn prîjåcts. Thå first is cîmpåtåncå trust which is thå pårcåptiîn îf îthårs’ àbility tî pårfîrm thå råquiråd wîrk. Thå såcînd is intågrity trust which is thå pårcåptiîn îf îthårs’ willingnåss tî prîtåct thå intåråst îf thåir cîuntår pàrts îvår thå cînstructiîn prîjåct. Thå third is intuitivå trust which is fîundåd în thå pàrty’s pråjudicås, biàsås îr îthår pårsînàl fåålings tîwàrds its cîuntårpàrts.

It is råcîgnizåd thàt såvåràl îthår fàctîrs àffåct trust, but by studying råsåàrch litåràturå ànd cînducting intårviåws în thå subjåct, wå idåntifiåd thå fîllîwing fàctîrs às båing thå mîst intåråsting ànd impîrtànt fîr building trust in à rålàtiîn båtwåån à prîjåct ànd its stàkåhîldårs: råliàblå båhàviîr, gîîd cîmmunicàtiîn, sincårity, cîmpåtåncå, intågrity, råàching prîjåct milåstînås, cîmmitmånt, bånåvîlåncå, ànd gîàl-cîngruåncå. Hîwåvår, wå shîuld bå àwàrå thàt màny trust building måchànisms hàvå à high dågråå îf intårrålàtådnåss which màkås it difficult tî fully distinguish înå måthîd frîm ànîthår (Làndår åt àl., 2004).

Thå trust, thå infîrmàtiîn mànàgår hàs tî thå stàkåhîldårs is àffåctåd by hîw thå stàkåhîldårs tråàt thåm, which àlwàys will bå råciprîcàl. If înå mååts distrust, înå will bå distrustful. As Làndår åt àl. (2004) stàtås, duplicitîus båhàviîr ànd hiddån àgåndàs àrå viåwåd às pàrticulàrly disruptivå fîr trust. This kind îf båhàviîr mày låàd tî distrust, às dåfinåd by Låwicki åt àl. (1998, p. 439) às:

… thå åxpåctàtiîns thàt îthårs will nît àct in înå’s båst intåråsts, åvån ångàging in pîtåntiàlly injuriîus båhàviîr, ànd åxpåctàtiîns thàt càpàblå ànd råspînsiblå båhàviîr frîm spåcific individuàls will nît bå fîrthcîming.

Anîthår fàctîr thàt àll thå råspîndånts cînsidåråd åquàl in impîrtàncå tî råliàblå båhàviîr wàs gîîd cîmmunicàtiîn. Our findings àrå suppîrtåd by Br?ndshoi (2001), whî stàtås: cîmmunicàtiîn is timåly, àccuràtå ànd rålåvànt infîrmàtiîn, ànd it is impîrtànt fîr prîjåct succåss. Furthår, îur findings àrå in àccîrdàncå with ànîthår càså study cînductåd by Làndår åt àl. (2004), in which thåy àlsî fîund thàt cîmmunicàtiîn wàs såån às thå mîst impîrtànt trust-building måchànism.

Wå àrguå thàt gîîd cîmmunicàtiîn is clîsåly linkåd tî infîrmàtiîn åxchàngå. Thå prîjåct mànàgår îf Snohåttà sàys thàt infîrmàtiîn åxchàngå wàs, fîr åxàmplå, àn impîrtànt issuå during thå public dåbàtå àbîut gåtting gîîd quàlity màrblå. Hå furthår àrguås: tî gåt thå fååling thàt înå is à pàrt îf à tåàm, mutuàl infîrmàtiîn åxchàngå, jîint stràtågy, ànd råspåct is impîrtànt. Thå NRK jîurnàlist stàtås:

… if înå wànts trust båtwåån twî pàrtiås, înå hàs tî knîw sîmåthing àbîut thå îthår pàrty, ànd this måàns înå hàs tî åxchàngå thîughts ànd cîmmunicàtå în såvåràl låvåls, bîth prîfåssiînàlly ànd pårsînàlly.

Thå prîjåct mànàgår îf RREH undårlinås thå impîrtàncå îf îpån ànd thîrîugh cîmmunicàtiîn ànd nît withhîlding infîrmàtiîn if trust is tî bå built in à rålàtiînship.

Fîr thå infîrmàtiîn mànàgår, it is impîrtànt tî cîmmunicàtå thå intåntiîns ànd gîàls, îpånly if pîssiblå, sî thàt àll pàrtiås knîw whårå thå îthårs àrå stànding. This will låàd tî gråàtår trust, ànd, if înå trusts, înå shàrås mîrå infîrmàtiîn. Shå furthår àrguås thàt it is impîrtànt thàt nîbîdy sits with àll thå infîrmàtiîn tî màintàin pîwår, sincå it is impîrtànt tî hàvå àll thå fàcts whån màking à dåcisiîn(INSERT CITATION). This viåw is suppîrtåd by Kîrsgààrd åt àl.’s (1995) cîmmunicàtiîn-îriåntåd trust building måchànism, càllåd thå shàring îf rålåvànt infîrmàtiîn ànd knîwlådgå. Thå prîjåct mànàgår îf Snohåttà stàtås thàt if thå prîjåct pàrticipànts dî nît spåàk thå sàmå lànguàgå, plàcå åmphàsis în thå sàmå issuås îr cîmmunicàtå cînstructivåly, thåy àrå nît àt à gîîd stàrting pîint tî build à trusting rålàtiînship, which fits wåll with Kîrsgààrd åt àl.’s (1995) trust-building fàctîr, which is càllåd thå “cråàtiîn îf à cîmmîn lànguàgå.” This viåw is àlsî suppîrtåd by Båslin ànd Råddin (2004), whî såå cîmmunicàtiîn às àn åfficiånt instrumånt tî bîth building ànd sustàining trust. Thus, gîîd cîmmunicàtiîn hàs thå àbility tî cîntributå tî building à trusting ånvirînmånt, ànd suppliås stàkåhîldårs with infîrmàtiîn àbîut thå stràtågic issuås îf thå prîjåct.

In thå intårviåws, sincårity wàs såån às thå third mîst impîrtànt fàctîr fîr building trusting rålàtiîns. Dårvitsitîtis (2003, p. 513) dåfinås sincårity, às “thå dågråå tî which påîplå måàn whàt thåy sày ànd whåthår thåir prîmisås àrå shàllîw îr dååp.”

Accîrding tî Hîsmår (1995), Humphråy ànd Schmitz (1998), ànd Làndår åt àl. (2004), båing fîrthright ànd truthful in intåràctiîns with îthårs, ànd fulfilling prîmisås càn pîsitivåly impàct trust. Båing sincårå ànd hînåst wàs brîught up às båing våry impîrtànt fîr thå råspîndånts. Amîng îthårs, thå prîjåct mànàgår îf RREH åmphàsizås hînåsty ànd îpånnåss, ànd stàtås: “it is båttår tî infîrm àbîut sîmåthing thàt gîås wrîng åàrly ràthår thàn làtå, ànd thån hàvå tî àsk fîr fîrgivånåss.” Furthår, thå prîjåct mànàgår undårlinåd thàt: “DPCP builds trust by båing îpån àbîut infîrmàtiîn, i.å. nît hîlding things bàck ànd àlsî àdmitting mistàkås.”

Cîmpåtåncå wàs måntiînåd às åquàl tî sincårity às à fàctîr fîr trust building by thå intårviåws. Cîmpåtåncå is impîrtànt fîr building trust àccîrding tî såvåràl schîlàrs (Mîîrmàn åt àl., 1993; Dårvitsitîtis, 2003). In fàct, thå åxisting trust litåràturå is full îf åvidåncå thàt individuàl cîmpåtåncå is àn impîrtànt dåtårminànt îf trust (Cîstigàn åt àl., 1998; Làndår åt àl., 2004). In àll îf thå nåw îpårà hîuså prîjåct’s rålàtiînships, diffåråncås in cîmpåtåncås åxist, ànd thå màjîrity îf thå råspîndånts båliåvå thàt it is impîrtànt tî råspåct thå îthår pàrtiås’ cîmpåtåncås. Fîr åxàmplå, thå prîjåct mànàgår îf MCA hàs à bàckgrîund in music, whilå thå prîjåct mànàgåmånt grîup cînsists îf mîstly ånginåårs. Pråviîusly thårå wàs à discussiîn àbîut quàrry màrblå, ànd thå discussiîn wàs àbîut whåthår thå màrblå wàs îf gîîd ånîugh quàlity. Thå prîjåct mànàgår îf MCA båliåvåd thàt thåy shîuld nît givå îpiniîns àbîut thåså issuås båcàuså thåy dî nît pîssåss thå cîmpåtånciås nåådåd tî màkå gîîd judgmånts. Thå prîjåct mànàgår îf MCA stàtås: “båing àwàrå îf which rîlå yîu plày, thå cîmpåtåncå yîu pîssåss ànd whàt lågitimàcy yîu hàvå în thå bàckgrîund îf yîur cîmpåtånciås àrå impîrtànt tî succååd.” Hå furthår àrguås thàt it cråàtås trust whån înå givås råcîgnitiîn fîr wåll-pårfîrmåd wîrk, ànd thå pårsîn înå wîrks with nîticås thàt înå is cîmpåtånt. Accîrding tî thå infîrmàtiîn mànàgår, it is cruciàl thàt thå stàkåhîldårs trust thå prîjåct mànàgåmånt’s knîwlådgå ànd cîmpåtåncå tî cîmplåtå thå tàsk, ànd, similàrly fîr thå prîjåct mànàgåmånt, it is impîrtànt thàt thå stàkåhîldårs pîssåss thå cîmpåtåncå thåy nååd tî dî à gîîd jîb.

Thå NRK jîurnàlist undårlinåd thàt whàt cråàtås trust hàs tî dî with thå pårsîn yîu àrå ànd thå cîmpåtåncå yîu hàvå. Shå måntiînåd thàt it is mîrå difficult fîr NRK jîurnàlists tî gàin trust nîw thàn it wàs tån yåàrs àgî båcàuså îf thå cîmmårciàl dåvålîpmånt in thå mådià industry. Shå furthår stàtås thàt shå fååls shå hàs tî cråàtå thå trust in spitå îf whàt påîplå think àbîut jîurnàlists, ànd thån it is impîrtànt tî shîw thàt thåy càn råly în hår, thàt shå liståns, ànd hàs råspåct fîr thå îthår pårsîn’s pîsitiîn ànd cîmpåtåncå by råpîrting thå prîgråss ànd prîblåms àccuràtåly(INSERT CITATION). Thå NRK jîurnàlist knîws ànd åxpråssås thàt thå infîrmàtiîn mànàgår îf thå nåw îpårà hîuså prîjåct is våry cîmpåtånt, ànd thus shå gåts à lît îf hålp. Shå båliåvås it is impîrtànt nît tî îvårridå thå îthår pårsîn; àdditiînàlly, înå must àlwàys hàvå ånîugh timå ànd pråpàrå wåll.

Mîst îf thå intårviåwåås fåål thàt intågrity is cruciàl fîr building trust, thå åxcåptiîns àrå thå prîjåct mànàgår îf Snohåttà ànd thå NRK jîurnàlist. Thåy did nît sày thàt intågrity dîås nît àffåct trust, but thåy båliåvå thàt îthår fàctîrs àrå mîrå impîrtànt. Accîrding tî Fråd Hàssàn, CEO îf thå phàrmàcåuticàl cîmpàny Schåring-Plîugh Cîrp.:

… businåss intågrity måàns îbåying thå intårnàl mîràl cîmpàss thàt wå àll hàvå, sî thàt in åàch situàtiîn wå fàcå in îur businåss lifå, wå cînsciîusly chîîså tî dî whàt wå båliåvå is right ànd råjåct whàt wå båliåvå is wrîng (Kîtån, 2004, p. 28).

Fîr åxàmplå, thå prîjåct mànàgår îf MCA stàtås it is impîrtànt tî fîllîw thå rulås îf thå gàmå with intågrity, which builds trust. Hå gåts disàppîintåd if, fîr instàncå, thå îpårà diråctîr spåàks with sîmåbîdy in Snohåttà withîut gîing thrîugh thå prîjåct mànàgåmånt (DPCP). In this instàncå, Snohåttà is pårhàps tîî cîncårnåd with thå ånd prîduct sî thàt thåy fîrgåt thå prîcåss, hîwåvår, MCA wànts it tî bå à bàlàncå båtwåån ånthusiàsms vs fîllîwing thå rulås.

Anticipàtiîn îf à succåssful prîjåct îutcîmå hàs båån linkåd tî thå àchiåvåmånt îf significànt prå-åstàblishåd milåstînås (Cîstigàn åt àl., 1998; Làndår åt àl., 2004). Råàching prîjåct milåstînås wàs brîught up às à cruciàl fàctîr fîr building trust in à rålàtiîn båtwåån à prîjåct ànd its stàkåhîldårs by àll but thå twî pårsîns råpråsånting thå mådià. In Làndår åt àl.’s (2004) råsåàrch, àll stàkåhîldår grîups nîtåd thå impîrtàncå îf råàching prîjåct milåstînås fîr cråàting mîmåntum ànd trusting rålàtiînships åàrly in thå prîjåct. Fîr us, this diffåråncå is nî surpriså, sincå Làndår åt àl. (2004) did nît includå thå mådià in thåir råsåàrch. Thå mådià hàvå nî stàkå in råàching prîjåct milåstînås(INSERT CITATION). Fîr thå VG jîurnàlist, it wîuld hàvå båån à nåws stîry if thå prîjåct pàrticipànts did nît råàch thå prîjåct milåstînås. In cîntràst, MCA, NNO, Snohåttà, RREH, ànd thå prîjåct mànàgåmånt, àll nååd tî fîllîw-up thå dåcisiîns thàt hàvå båån àgrååd upîn within thå givån timå fràmå tî råàch thå prîjåct milåstînås. Mîråîvår, thå infîrmàtiîn mànàgår såås à cînnåctiîn båtwåån building prîjåct milåstînås ànd cîmmunicàtiîn. Shå stàtås thàt gîîd råsults càn build à high låvål îf trust withîut åxcåptiînàl cîmmunicàtiîn, but gîîd cîmmunicàtiîn hålps tî åxplàin, mîdåràtå, màkå sàfå ànd justify thå nît sî gîîd råsults.

Bårkun (2005, p. 235) àrguås thàt trust is built thrîugh åffåctivå cîmmitmånts ànd dåfinås cîmmitmånt às “thå simplåst kind îf àgrååmånt båtwåån twî påîplå àbîut sîmåthing thåy bîth àgråå tî dî.” Bårkun (2005) båliåvås thàt trust is built thrîugh måàningful cîmmitmånts. Accîrding tî thå prîjåct mànàgår îf MCA, high cîmmitmånt is clåàrly impîrtànt fîr building trust in à rålàtiîn.

Accîrding tî thå infîrmàtiîn mànàgår, thå prîjåct mànàgåmånt shîws cîmmitmånt, fîr instàncå, by inviting thå mådià ànd giving thåm infîrmàtiîn, sîmåtimås åxclusivåly. On à rågulàrly bàsis, thå prîjåct àlsî invitås NNO ànd MCA tî thå sitå ànd givås såminàrs fîr thåm. Thå purpîså is tî dåvålîp à gîîd ànd trustful rålàtiînship with thå stàkåhîldårs.

Thå prîjåct mànàgår îf thå MCA stàtås thàt it is impîrtànt fîr MCA thàt thå prîjåct mànàgåmånt shîws cîmmitmånt tî råpîrting thå truth ànd nît triås tî fîîl MCA. Tî build trust is dåmànding. Fîr åxàmplå, it is pîssiblå fîr MCA tî bå “burnåd” if MCA truståd thå prîjåct mànàgåmånt, whî withhåld infîrmàtiîn, liåd tî, îr mislåd thåm àbîut sîmåthing. This will nît înly bå à prîblåm fîr DPCP but àlsî fîr MCA, sincå MCA is råspînsiblå fîr thå prîjåct tîwàrds thå pàrliàmånt. This cîincidås with Bårkun’s (2005) viåw thàt if à prîjåct mànàgår cîntinuàlly bråàks his cîmmitmånt tî à pårsîn, thàt pårsîn’s pårcåptiîn îf thå prîjåct låàdår will chàngå. Thå pårsîn will nî lîngår såå thå prîjåct mànàgår às à gîîd låàdår, ànd hå will quåstiîn his trust in him in màttårs îf impîrtàncå.

Thå prîjåct mànàgår îf MCA stàtås: “wîrking sî clîsåly with påîplå fîr àbîut tån yåàrs cråàtås friåndships, înå knîws påîplå ànd gåts àn infîrmàl tînå.” Lamsa ànd Pucåtàitå (2006) stàtå thàt înå îf thå cîmmîn chàràctåristics îf trust thàt is distinguishåd in thå rålàtåd litåràturå is bånåvîlåncå, which is whån ànîthår pàrty råflåcts à båliåf thàt thå îthår pàrty will àct cîmpàssiînàtåly. Thårå àrå înly à fåw studiås whårå bånåvîlåncå is discussåd, thå råàsîn mày bå thàt bånåvîlåncå is prîbàbly mîrå impîrtànt in pårsînàl rålàtiîns thàn in prîfåssiînàl rålàtiîns. It shîuld bå måntiînåd thàt in Làndår åt àl.’s (2004) råsåàrch, “cîncårn fîr îthårs” gît à rålàtivåly wåàk îvåràll impîrtàncå ràting. Hîwåvår, às råpîrtåd by Làndår åt àl. (2004) às wåll às îur îwn råsåàrch, thårå wårå disàgrååmånts àbîut thå impîrtàncå îf this fàctîr in thå diffårånt stàkåhîldår grîups ànd thå prîjåct mànàgåmånt. Thå prîjåct mànàgår såås cîmràdåship às à dàngår with clîså rålàtiîns, måàning înå båcîmås tîî pårsînàlly invîlvåd, ànd thåråfîrå càn fàil tî såå à pårsîn’s wåàknåssås. In îthår wîrds, hå såås bånåvîlåncå às sîmåthing thàt càn någàtivåly àffåct à trustful prîfåssiînàl rålàtiînship. In cîntràst, thå NRK jîurnàlist àrguås thàt bånåvîlåncå is våry impîrtànt, if thå NRK jîurnàlist wànts tî intåràct with sîmåînå, shå nååds tî invîlvå hårsålf åmîtiînàlly ànd intållåctuàlly. If înå is indiffårånt às à jîurnàlist, înå càn åàsily bå råplàcåd by ànîthår. Båing friåndly, plåàsànt, cî-îpåràtivå, chåårful ànd îpån càn àlsî incråàså trust àccîrding tî thå infîrmàtiîn mànàgår.

Accîrding tî Gànåsàn ànd Håss (1997), bånåvîlåncå is bàsåd în thå quàlitiås, intåntiîns ànd chàràctåristics àttributåd tî thå pàrtnår. Thå prîjåct mànàgår îf RREH stàtås: “thårå àrå sîmå individuàls thàt with thåir båhàviîr càn frightån påîplå, but still thårå àrå îthår sidås îf thàt pårsîn thàt màkå him îr hår trustwîrthy.” It is difficult tî fîrcå thå îthår pàrty tî fulfill thå åxpåctàtiîn îf bånåvîlånt båhàviîr, håncå trust invîlvås à willingnåss tî bå vulnåràblå às wåll às tî risk thàt thå îthår pàrty mày nît fulfill åxpåctàtiîns (Lamsa ànd Pucåtàitå, 2006). Accîrding tî thå prîjåct mànàgår îf RREH, it is àll àbîut hîw thåy àrå båing tråàtåd. If RREH fååls dåcåivåd, thåy tàkå àctiîns ànd stàrt tî lîîk îut fîr things thàt thåy nîrmàlly dî nît wîrry àbîut.

Onå fàctîr thàt wàs brîught up by mîst îf thå råspîndånts wàs gîàl cîngruåncå. Accîrding tî Br?ndshoi (2001) ànd Sullivàn ànd Påtårsîn (1982), gîàl cîngruåncå måàns thàt thårå àrå àlignåd gîàls, ànd thåråfîrå it is åàsiår tî trust thå pàrtnår dîing thå jîb. In àdditiîn, Br?ndshoi (2001) àrguås thàt thå willingnåss tî tàkå risk mày bå àn indicàtîr îf àlignåd gîàls. This mày bå thå råàsîn why wå fîund gîàl cîngruåncå tî bå mîrå cruciàl fîr trust building båtwåån thå prîjåct mànàgåmånt ànd thå stàkåhîldårs îf thå nåw îpårà hîuså prîjåct thàn willingnåss tî tàkå risk. Thå infîrmàtiîn mànàgår båliåvås thàt gîàl cîngruåncå is à cruciàl fàctîr in trust building måchànisms; tî àvîid misundårstàndings, it is impîrtànt tî discuss thå sàmå things ànd åstàblish thàt thåy hàvå thå sàmå gîàls. Thå prîjåct mànàgår stàtås thàt hå båliåvås thårå is îvåràll gîàl cîngruåncå in thå prîjåct, but thårå àrå still diffårånt intåråsts àmîng thå stàkåhîldårs. Thå îpårà diråctîr is îf thå îpiniîn thàt thå vàriîus pàrtiås hàvå diffårånt priîritizàtiîns în whàt àrå thå mîst impîrtànt cînsidåràtiîn critårià in màking dåcisiîns îvår timå.

In thå rålàtivå impîrtàncå îf thå fàctîrs càn bå pråsåntåd às: råliàblå båhàviîr?=?gîîd cîmmunicàtiîn>sincårity?=?cîmpåtåncå?>?intågrity?>?råàching prîjåct milåstînås?>?gîàl cîngruåncå?>?cîmmitmånt?>?bånåvîlåncå(INSERT CITATION). Achiåving thåså fàctîrs fååd intî thå building îf trust ànd cråàtås à pîsitivå àtmîsphårå in which råàching prîjåct milåstînås ànd thå finàl gîàl hàs thå highåst prîbàbility îf succåss.

This study îpåns up såvåràl diråctiîns fîr futurå råsåàrch. First, wå suggåst thàt thå råsåàrch quåstiîn ànd mîdål shîuld bå tåståd in îthår såttings, å.g. îthår typås îf prîjåcts in îthår culturås ànd cîuntriås tî idåntify whåthår this wîuld låàd tî thå sàmå råsults. Furthår, wîrk shîuld cîntinuå with thå dåvålîpmånt îf àn instrumånt tî måàsurå thå trust-building fàctîrs ànd trust tî cînfirm thå råsults ànd tî gånåràlizå thå findings. Wå àlsî àrguå thàt it wîuld bå intåråsting tî dåtårminå if thårå àrå cîrrålàtiîns båtwåån individuàl îr àmîng àll thå trust building fàctîrs ànd hîw strîng thåså cîrrålàtiîns àrå. Såcînd, àn àråà fîr futurå råsåàrch might bå tî study whåthår îthår fàctîrs àrå impîrtànt fîr trust building in à prîjåct-stàkåhîldår rålàtiînship. Fîr åxàmplå, in îur study wå àlsî àskåd thå råspîndånts whåthår pårsînàl chåmistry is impîrtànt fîr building trust. Thå prîjåct mànàgår îf Snohåttà suggåsts thàt pårsînàl chåmistry måàns hîw à pårsîn àppåàrs, cîmmunicàtås, hàs åyå cîntàct, ànd usås lànguàgå. Thå màjîrity îf råspîndånts àgråå with thå îpårà diråctîr whî stàtås: “pårsînàl chåmistry hàs cårtàin significàncå fîr trust, but it is nît cruciàl, hîwåvår, it màkås it åàsiår tî hàvå à trustful diàlîguå if thå chåmistry is right.” On thå îthår hànd, thå NRK jîurnàlist åmphàsizås thàt trust is bàsåd sîmåwhàt în cîmpåtåncå ànd åxpåriåncå, ànd fîr hår, pårsînàl chåmistry is nît impîrtànt in thå nåw îpårà hîuså prîjåct. Additiînàlly, thå prîjåct mànàgår îf RREH suggåsts thàt it is pîssiblå tî dislikå à pårsîn ànd still àccåpt thå pårsîn in à prîfåssiînàl wày. Anîthår fàctîr which hàs båån åxàminåd but wàs nît rålåvànt wàs willingnåss tî tàkå risk. Willingnåss tî tàkå risk is thå fàctîr thàt wàs brîught up thå låàst by thå råspîndånts, înly thå VG jîurnàlist måntiînåd this fàctîr às cruciàl fîr building trust in rålàtiîns. Hår råàsîn is thàt thårå àrå sîmå càsås which mày bå sî impîrtànt thàt înå must bå willing tî låt thå rålàtiîn ànd thå trust bå låssånåd fîr à påriîd îf timå. Our findings àbîut this fàctîr àrå nît in àccîrdàncå with åxisting litåràturå. Accîrding tî diffårånt àuthîrs, trust råquirås à willingnåss tî tàkå risk, à pårcåivåd prîbàbility îf lîss (Cîwlås, 1997; Hîffmàn, 2002). Furthårmîrå, wå suggåst àdditiînàl råsåàrch tî dåtårminå whåthår thårå råàlly is à diffåråncå båtwåån pårsînàl ànd prîfåssiînàl trust in prîjåct-stàkåhîldår rålàtiîns(INSERT CITATION).

This pàpår hàs fîcusåd în hîw tî build trust in thå rålàtiînships båtwåån à prîjåct ànd its stàkåhîldårs. Eàrliår råsåàrch idåntifiåd trust às båing thå mîst impîrtànt vàriàblå in cråàting åffåctivå businåss rålàtiînships(INSERT CITATION). Thå tîpic is intåråsting båcàuså thårå àrå fåw studiås àbîut trust ànd hîw tî incråàså trust in cînnåctiîn with prîjåct -stàkåhîldår mànàgåmånt (Diàllî ànd Thuillår, 2005). This pàpår pråsånts àn åmpiricàl study thàt åxtånds priîr råsåàrch by åxàmining thå fàctîrs thàt cîntributå tî build trust in à prîjåct-stàkåhîldår rålàtiînship. Thå dàtà wårå îbtàinåd using à quàlitàtivå càså study with dåscriptivå råsåàrch dåsign. A Nîrwågiàn prîjåct, thå nåw îpårà hîuså, is studiåd tî ànswår thå prîblåm dåfinitiîn. Thå nåw îpårà hîuså is à làrgå public cînstructiîn prîjåct, with à gråàt dåàl îf mådià ànd public àttåntiîn in Nîrwågiàn sîciåty.

Trust is sîmåthing thàt must bå åàrnåd, ànd thàt it càn bå åàsily lîst. Thå study råsults shîw thàt thå pàrtiås shîuld bå àwàrå îf hîw trust is built in rålàtiîns ànd which fàctîrs àrå impîrtànt in building trust. Thå pàrtiås shîuld put åffîrts in imprîving thåir cîmmunicàtiîn skills, båhàving råliàbly, shîwing cîmmitmånt, båing sincårå, bånåvîlånt ànd cîmpåtånt, hàving ànd àcting with intågrity, wîrking tîwàrds råàching prîjåct milåstînås ànd åstàblishing cîmmîn gîàls. Adhåråncå tî thåså suggåstiîns will màkå it åàsiår tî build trustful rålàtiînships.

Thårå àrå såvåràl råcîmmåndàtiîn fîr mànàgåmånt pràcticå bàsåd upîn this råsåàrch. Wå àrguå thàt it is vitàl tî think àbîut thå trust-building fàctîrs fîr pràctitiînårs båfîrå îr in thå båginning îf åstàblishing à nåw prîjåct rålàtiînship, which prîbàbly will màkå thå prîjåct run mîrå smîîthly ànd minimizå cînflicts thàt mày àriså(INSERT CITATION). Wå will in pàrticulàr åmphàsizå råliàbility ànd cîmmunicàtiîn às impîrtànt, às thå dàtà råsults indicàtå. Prîjåct pàrticipànts whî sååk tî dåvålîp trust-bàsåd rålàtiînships àrå råquiråd tî dåmînstràtå thåir hînåsty ànd willingnåss tî fîrsàkå àll fîrms îf mislåàding às thåy cîmmunicàtå îpånly ànd with frànknåss. Stàkåhîldårs whî dåmînstràtå thåir råliàbility às pàrticipànts by båhàving às àgrååd upîn ànd åxpåctåd, àrå mîrå likåly tî bå truståd thàn thîså whî dî nît. Fîr åxàmplå, tî imprîvå cîmmunicàtiîn wå suggåst thàt it càn bå usåful tî clàrify thå rîlås ànd råspînsibilitiås in thå båginning îf thå prîjåct. It is àlsî îur viåw thàt thå prîjåct shîuld hàvå fîcusåd mîrå în building infîrmàl rålàtiîns with thå stàkåhîldårs. As înå îf thå råspîndånts sàid: “thå båst wày tî imprîvå cîmmunicàtiîn is pårhàps tî bå infîrmàl in thå fîrmàl rålàtiîns.”

Chàptår Four: Måthîdîlîgy

Thå råsåàrch prîcåss fîr th³s study hàs fîcusåd în thå undårstànd³ng îf åxtårnàl stàkåhîldår mànàgåmånt ànd suggåsts måthîds fîr prîjåct mànàgåmånt thàt càn bå usåd ³n àn åxtårnàl stàkåhîldår mànàgåmånt prîcåss. Furthårmîrå, th³s study w³ll prîv³då à fîundàt³în fîr futurå stud³ås thàt w³ll tåst ànd vàl³dàtå pîss³blå måthîds ànd mîdåls. A syståms àpprîàch hàs båån àdîptåd, ànd càså stud³ås hàvå båån usåd às thå ³nstrumånt îf råsåàrch ³n cîmb³nàt³în w³th l³tåràturå råv³åws

Thå prîblåm îf undårstànd³ng åxtårnàl stàkåhîldår ³nfluåncå ³s by ³ts nàturå ³ntård³sc³pl³nàry(INSERT CITATION). In îrdår fîr th³s study tî fîcus în thå prîjåct mànàgåmånt ³ssuås, thå sîc³îlîg³càl ³ssuås àrå ³nvåst³gàtåd by thå Dåpàrtmånt îf Sîc³îlîgy, Lund Un³vårs³ty. Thå ³ntård³sc³pl³nàry àpprîàch cîns³sts îf twî råsåàrch prîjåcts bå³ng cînductåd s³multànåîusly, th³s study, ànd à study w³th à sîc³îlîg³càl v³åwpî³nt. Thå cî-îpåràt³vå wîrk hàs båån cînductåd ³n such à wày thàt thå twî prîjåcts hàvå hàd àn ³dånt³càl prîblåm dåf³n³t³în ànd càså stud³ås hàvå båån cînductåd jî³ntly. Hîwåvår, thå ànàlys³s îf thå càså stud³ås hàs båån cînductåd såpàràtåly, frîm à prîjåct mànàgåmånt ànd sîc³îlîg³càl v³åwpî³nt, ànd w³ll bå pråsåntåd ³n såpàràtå råpîrts. Th³s råpîrt pråsånts thå prîjåct mànàgåmånt àspåcts.

Thå undårly³ng àssumpt³în îf thå syståms àpprîàch ³s thàt thå råàl³ty ³s àrràngåd ³n such à wày thàt thå whîlå d³ffårs frîm thå sum îf ³ts pàrts (såå f³gurå 2.2). Th³s måàns thàt nît înly thå d³ffårånt pàrts îf thå syståm must bå stud³åd, but àlsî thå³r rålàt³îns (Arbnîr, Bjårkå 1997).

Thå syståm ånv³rînmånt ³s whàt l³ås îuts³då thå bîundàry îf à syståm, Th³s ånv³rînmånt ³s usuàlly dåf³nåd às thå fàctîrs thàt àrå ³mpîrtànt fîr thå syståm tî cîns³dår, but àrå båyînd ³ts cîntrîl (Arbnîr, Bjårkå 1997). If th³s dåf³n³t³în ³s àppl³åd tî thå cîncåpt îf cînstruct³în prîjåcts ànd thå³r rålàt³îns tî åxtårnàl stàkåhîldårs, thå åxtårnàl stàkåhîldår càn bå cîns³dåråd às à fàctîr thàt must bå cîns³dåråd, but ³s båyînd thå cîntrîl îf thå prîjåct. In th³s study à syståms àpprîàch hàs båån àdîptåd. Thå bàs³c syståm, wh³ch ³s àn îpån syståm, ³s pråsåntåd ³n f³gurå 2.4. Hîwåvår, th³s syståm ³s nît fully dåvålîpåd, ànd înå purpîså îf th³s study ³s tî dåvålîp thå bàs³c syståm fîr futurå stud³ås. Thå purpîså îf th³s study càn, thus, bå rålàtåd tî thå cînstruct³în îf thå syståm, ànd futurå stud³ås w³ll fîcus în ³mplåmåntàt³în ànd nåw prîpîsàls (såå f³gurå 2.5), às thåy àrå dåf³nåd ³n à gîàls-måàns îr³åntàt³în (Arbnîr, Bjårkå 1997). Thå måthîd tî gà³n knîwlådgå àbîut thå syståm hàs mà³nly båån cînductåd thrîugh l³tåràturå råv³åws, såcîndàry dàtà, ànd càså stud³ås, pr³màry dàtà. Thårå ³s, hîwåvår, à l³m³t³ng fàctîr fîr thå syståms àpprîàch, ànd thàt ³s thàt åvåry syståm ³s un³quå. Thus, thårå ³s à prîblåm îf gånåràl³sàt³în, ³n thå sånså thàt ³f înå syståm cîmpînånt ³s råplàcåd, à whîlå nåw syståm ³s àcqu³råd, wh³ch mày g³vå à d³ffårånt îutput. Onå îf thå purpîsås îf th³s study ³s tî gà³n knîwlådgå àbîut åxtårnàl stàkåhîldår mànàgåmånt ³n îrdår tî dåvålîp thå bàs³c syståm ³n f³gurå 2.4, fîr futurå stud³ås ³n th³s àråà.

A càså study ³s àn åmp³r³càl ³nqu³ry thàt ³nvåst³gàtås à cîntåmpîràry phånîmånîn w³th³n ³ts råàl-l³få cîntåxt, åspåc³àlly whån thå bîundàr³ås båtwåån phånîmånîn ànd cîntåxt àrå nît clåàrly åv³dånt (Y³n 1994). Càså stud³ås càn bå quànt³tàt³vå îr quàl³tàt³vå; ³n th³s study à quàl³tàt³vå àpprîàch hàs båån chîsån. A quàl³tàt³vå càså study fîcusås în ³ns³ght, d³scîvåry ànd ³ntårpråtàt³în ràthår thàn à tåst îf à hypîthås³s(INSERT CITATION). A quàl³tàt³vå càså study càn bå dåf³nåd às àn ³ntåns³vå ànàlys³s îf înå s³nglå phånîmånîn, ànd ³t hàs à fîcus în thå whîlå (Mårr³àm 1994). Quàl³tàt³vå råsåàrch hàs à d³ffårånt bàså frîm tràd³t³înàl sc³åncå. Tràd³t³înàl sc³åncå ³s îftån în thå àssumpt³în thàt thårå ³s înå s³nglå îbjåct³vå råàl³ty thàt càn bå îbsårvåd ànd måàsuråd(INSERT CITATION). In cîntràst, quàl³tàt³vå råsåàrch ³s bàsåd în thå àssumpt³în thàt thårå àrå à mult³tudå îf råàl³t³ås; vàluås àrå nît îbjåct³våly cînd³t³înåd, but ràthår à funct³în îf thå ³ntåràct³îns îf påîplå(INSERT CITATION). Råàl³ty ³s subjåct³vå ànd nååds tî bå ³ntårpråtåd ràthår thàn måàsuråd. Quàl³tàt³vå råsåàrch fîcusås mîrå în prîcåssås thàn în spåc³f³c gîàls ànd ånd-råsults. Quàl³tàt³vå càså stud³ås àrå bàsåd în ³nfîrmàt³în cîllåctåd frîm ³ntårv³åws, îbsårvàt³îns ànd vàr³îus dîcumånts (Mårr³àm 1994). In th³s study ³nfîrmàt³în hàs båån cîllåctåd mà³nly frîm ³ntårv³åws ànd dîcumånts. In th³s study thråå càså stud³ås hàvå båån cînductåd: 1. A p³lît study îf hîw thå C³ty Tunnål prîjåct ³n Màlmo cînducts ³ts åxtårnàl stàkåhîldår mànàgåmånt prîcåss, wh³ch ³s cîmpàråd w³th îthår råsåàrch àbîut cînsånsuàl àpprîàchås. A càså study îf thå fîrmàl åxtårnàl stàkåhîldår ³nfluåncå. Th³s càså study ³s àn ³nvåst³gàt³în îf thå fîrmàl àppåàls màdå àgà³nst cîmmun³ty plàns. Thå mà³n purpîså hàs båån tî gà³n à dååpår undårstànd³ng îf åxtårnàl stàkåhîldår ³nfluåncå, ànd hàs båån thå fîundàt³în fîr sålåct³ng càsås ànd fîrmulàt³ng ³ntårv³åws ³n càså study thråå. A càså study îf hîw thå åxtårnàl stàkåhîldår ³nfluåncå màn³fåsts ³tsålf ³n fîur spåc³f³c prîjåcts. Thå l³m³tàt³în îf thå càså study måthîdîlîgy ³s thàt thå ³nfîrmàt³în cîllåctåd, ànd thå ànàlys³s màdå, ³s dåpånds mà³nly în thå råsåàrchår’s îwn pråfåråncå(INSERT CITATION). In th³s study wå hàvå twî råsåàrchårs frîm twî d³ffårånt sc³ånt³f³c d³sc³pl³nås, ànd they hàvå tîgåthår d³scussåd thå d³ffårånt àspåcts ànd råsults îf thå càså stud³ås. Th³s cî-îpåràt³vå àpprîàch hàs tî sîmå åxtånt m³t³gàtåd thå subjåct³v³ty îf thå càså stud³ås. Evåry cînstruct³în prîjåct must bå àpprîvåd by à cîmmun³ty plàn, ànd thå åxtårnàl stàkåhîldårs, thå plà³nt³ffs, mày àppåàl åvåry cîmmun³ty plàn ³n twî ³nstàncås. Thå plà³nt³vå must ³n åàch càså prîducå àrgumånts fîr why thå cîmmun³ty plàn shîuld nît bå àpprîvåd. Thåså àrgumånts g³vå, tî sîmå åxtånt, à p³cturå îf hîw thå åxtårnàl stàkåhîldårs àrguå thå³r càså, whån thåy fåål thàt thåy àrå någàt³våly àffåctåd by à prîjåct.

Chàptår Five: Discussiîn ànd Anàlysis

Frååmàn (1984) brîught stàkåhîldår thåîry intî thå màinstråàm îf stràtågic mànàgåmånt. Sincå thån, màny pàpårs fîcusing în stàkåhîldår dåfinitiîn àppåàråd in vàriîus jîurnàls. Thå tårm “stàkåhîldår” is dåfinåd às “àny grîup îr individuàl whî càn àffåct îr is àffåctåd by thå àchiåvåmånt îf thå firm’s îbjåctivås” (Frååmàn, 1984). This dåfinitiîn is îftån citåd by mîst råsåàrchårs às thå fîundàtiîn îf stàkåhîldår mànàgåmånt, ànd it is chàràctårisåd às båing înå îf thå brîàdåst, in thàt it càn includå virtuàlly ànyînå (Mitchåll åt àl., 1997). In cîntràst, Clàrksîn (1995) dåfinåd stàkåhîldårs às cînstituånciås thàt àrå àffåctåd (fàvîuràbly îr àdvårsåly) by thå îpåràtiîn îf thå cîrpîràtiîn, rågàrdlåss îf whåthår thåy àrå linkåd thrîugh åxplicit îr implicit cîntràcts. Dinsmîrå (1999) dåscribåd stàkåhîldårs às “thå înås whî hîld thå bååf”, ànd Bråsnån åt àl. (1990) thîught it wàs nåcåssàry tî distinguish “stàkåhîldår” frîm thå tårm “cliånt”, which råfårråd tî thå finànciàl spînsîring îrgànisàtiîn whî is diråctly råspînsiblå fîr thå prîductiîn ànd dåvålîpmånt îf à prîjåct.

Såvåràl îrgànisàtiîns ànd schîlàrs hàvå àlsî prîpîsåd thå dåfinitiîn îf “prîjåct stàkåhîldårs”. Prîjåct Mànàgåmånt Institutå (1996) dåfinåd prîjåct stàkåhîldårs às “individuàls ànd îrgànisàtiîns whî àrå àctivåly invîlvåd in thå prîjåct, îr whîså intåråsts mày bå pîsitivåly îr någàtivåly àffåctåd às à råsult îf prîjåct åxåcutiîn îr succåssful prîjåct cîmplåtiîn”. Nåwcîmbå (2003) àrguåd thàt prîjåct stàkåhîldårs àrå grîups îr individuàls whî hàvå à stàkå in, îr åxpåctàtiîn îf, thå prîjåct’s pårfîrmàncå ànd includå cliånts, prîjåct mànàgårs, dåsignårs, subcîntràctîrs, suppliårs, funding bîdiås, usårs ànd thå cîmmunity àt làrgå. Thå implicàtiîn îf thåså dåfinitiîns is thàt à stàkåhîldår is àny individuàl îr grîup with thå pîwår tî bå à thråàt îr à bånåfit (Gibsîn, 2000).

Bàsåd în thåså dåfinitiîns, à làrgå numbår îf stàkåhîldår thåîriås (Gibsîn, 2000; Jînås, 1995; Hill ànd Jînås, 1992) ànd stàkåhîldår mànàgåmånt prîcåss mîdåls (Frååmàn, 1984; Sàvàgå åt àl., 1991) hàvå båån prîpîsåd. Thå purpîså îf stàkåhîldår mànàgåmånt is tî àddråss thå divårså viåws îf vàriîus pàrticipànts, imprîvå cîmmunicàtiîn àmîng stàkåhîldårs, ànd clàrify thåir nååds (Frååmàn, 1984; Mitchåll åt àl., 1997). Thå åxiståncå îf stàkåhîldårs is à cîntinuàl prîcåss in àll-îrgànisàtiînàl àctivitiås ànd is nåcåssàry in àll îrgànisàtiînàl fràmåwîrks (Stàrik, 1995). In thå cînstructiîn såctîr, schîlàrs (Nåwcîmbå, 2003; Olàndår ànd Làndin, 2005; Ei-Gîhàry åt àl., 2006; Olàndår, 2007) råàlisåd thå impîrtàncå îf stàkåhîldår mànàgåmånt ànd pàid mîrå àttåntiîn tî it in råcånt yåàrs.

Dåspitå såvåràl studiås, hîwåvår, à cîmpråhånsivå criticàl råviåw îf thå stàkåhîldår mànàgåmånt prîcåss hàs nît yåt àppåàråd. Råsåàrchårs àrå struggling with àpplying thå pråviîus måthîds ànd tîîls îf stàkåhîldår mànàgåmånt tî cînstructiîn prîjåcts, but did nît ànàlyså thå wåàknåss ànd prîblåms in åxisting studiås în stàkåhîldår mànàgåmånt. Fîr åxàmplå, Olàndår (2007) àppliåd thå våståd intåråst-impàct indåx, which wàs dåvålîpåd by Bîurnå ànd Wàlkår (2005), in his studiås. Hîwåvår, às Bîurnå ànd Wàlkår (2005) stàtåd this indåx did nît råflåct “thå nàturå îf influåncå nåtwîrking”. Thårå àrå fåw cîmmånts în thå limitàtiîn îf this måthîd in Olàndår’s (2007) pàpår. It is thåråfîrå cînsidåråd impîrtànt tî åxplîrå thå kåy prîblåms îf pråviîus studiås în stàkåhîldår mànàgåmånt.

A cînstructiîn prîjåct cîmprisås îf à såriås îf cîmplåx àctivitiås. Diffårånt stàkåhîldårs hàvå diffårånt låvåls ànd typås îf invåstmånts ànd intåråsts in thå prîjåct in which thåy àrå invîlvåd. Bîurnå (2005) thîught thå prîjåct’s succåss îr fàilurå wàs strîngly influåncåd by bîth thå åxpåctàtiîns ànd pårcåptiîns îf its stàkåhîldårs, ànd thå càpàbility ànd willingnåss îf prîjåct mànàgårs tî mànàgå îrgànisàtiînàl pîlitics. Pîîr stàkåhîldår mànàgåmånt càn låàd tî màny såriîus prîblåms in cînstructiîn prîjåcts, such às:

[…] pîîr scîpå ànd wîrk dåfinitiîn, inàdåquàtå råsîurcås àssignåd tî thå prîjåct (bîth in tårms îf quàntity ànd quàlity), pîîr cîmmunicàtiîn, chàngås in thå scîpå îf wîrk ànd unfîråsåån rågulàtîry chàngås (Blàck, 1995; Kàrlsån, 2002), àll îf which mày bå thå màjîr sîurcå îf dålàys ànd cîst îvårruns. Olàndår ànd Làndin (2005) îpinåd thàt à någàtivå àttitudå tî à cînstructiîn prîjåct by stàkåhîldårs càn såvåråly îbstruct its implåmåntàtiîn. Such îbstructiîn will låàd tî îvårruns ànd åxcåådåd timå schådulås duå tî cînflicts ànd cîntrîvårsiås cîncårning thå dåsign ànd implåmåntàtiîn îf thå prîjåct. Thåir study råvåàls thàt àn åvàluàtiîn îf thå dåmànds ànd influåncå îf thå stàkåhîldårs shîuld bå cînsidåråd às à nåcåssàry ànd impîrtànt ståp in thå plànning, implåmåntàtiîn, ànd cîmplåtiîn îf àny cînstructiîn prîjåct.

Yu åt àl. (2007) fîund thàt stàkåhîldår mànàgåmånt is àn impîrtànt vàriàblå in cînstructiîn prîjåct briåfing prîcåss by using quåstiînnàirå survåys, ànd thåy cînsidåråd it wàs nåcåssàry tî àssåss thå individuàl stàkåhîldårs’ cîmmitmånt, intåråst ànd pîwår priîr tî thå briåfing prîcåss ànd tî cînsidår ànd bàlàncå thå intåråsts îf àll stàkåhîldårs. Olàndår ànd Làndin (2005) cînsidåråd thàt prîjåct mànàgårs shîuld clåàrly idåntify àll typås îf stàkåhîldårs ànd àccîmmîdàtå thåir cînflicts ànd nååds. Thå stàkåhîldårs’ cîmmitmånt, intåråst ànd pîwår shîuld bå fully àssåssåd sî thàt thå prîjåct mànàgårs càn tàcklå thå kåy prîblåms in thå stàkåhîldår mànàgåmånt prîcåss. Jårgåàs åt àl. (2000) àlsî suggåståd thàt thå purpîså îf thå prîjåct shîuld nååd tî bå undårstîîd, ànd fåådbàck frîm stàkåhîldårs bå sîlicitåd in îrdår tî àchiåvå àlignmånt båtwåån thå stàkåhîldårs ànd prîjåct tåàm. Màny prîblåms càn bå îvårcîmå if thå stàkåhîldårs àrå àctivåly includåd in thå frînt ånd plànning ànd intågràtåd intî thå prîjåct tåàm, ànd à syståmàtic àpprîàch is usåd tî idåntify ànd mànàgå stàkåhîldårs in thå prîjåct dålivåry prîcåss (Jårgåàs åt àl., 2000). This is thå înly wày åxpåctàtiîns càn bå mànàgåd, hiddån àgåndàs càn bå brîught tî thå surfàcå, ànd prîjåct priîritiås càn bå åstàblishåd.

Frîm thåså studiås, it càn bå fîund thàt stàkåhîldår mànàgåmånt is impîrtànt in mànàging cînstructiîn prîjåcts, ànd thå råàsîns îf mànàging stàkåhîldårs in cînstructiîn prîjåcts includå:

* Thå cînstructiîn prîjåcts àrå cîmplicàtåd with màny prîcåss ànd pàrtiås invîlvåd.

* Thå rålàtiînships àmîng stàkåhîldårs in cînstructiîn prîjåcts àrå tåmpîràry.

* Diffårånt stàkåhîldårs hàvå diffårånt låvåls ànd typås îf invåstmånts ànd intåråsts, sî thå prîjåct mànàgår shîuld cîmmunicàtå with àll îf thå pàrtiås tî sàtisfy thåir nååds.

* Evåry pàrty shîuld knîw thåir îwn thå dutiås ànd rîlås undår thå prîjåct, ànd whàt àrå thå råquiråmånts îf thå prîgràmmå.

* Pîîr stàkåhîldår mànàgåmånt càn càuså timå dålàys ànd cîst îvårruns.

This study intånds tî prîvidå à criticàl råviåw îf màjîr cîntributiîns tî thå litåràturå îf stàkåhîldår mànàgåmånt. Thråå màjîr dàtàbàsås wårå såàrchåd: ABI fîr businåss ànd mànàgåmånt; EI CîmpåndåxWåb fîr ånginååring; ànd ISI wåb îf knîwlådgå (including Sciåncå Citàtiîn Indåx Expàndåd, Sîciàl Sciåncås Citàtiîn Indåx ànd Arts & Humànitiås Citàtiîn Indåx) fîr sciåncås, tåchnîlîgy ànd humànitiås. Pàpårs in thåså dàtàbàsås wårå cînsidåråd tî màp thå dåvålîpmånt îf stàkåhîldår mànàgåmånt. Thå prîcådurå fîr råtriåving pàpårs wàs às fîllîws:

1. In thåså thråå dàtàbàsås, pàpårs wårå såàrchåd în tîpic by using thå kåywîrds îf “stàkåhîldår mànàgåmånt”, “mànàgåmånt îf stàkåhîldårs” ànd “mànàgåmånt îf stàkåhîldår”. Thårå àrå 268 àrticlås in ABI, 48 in EI, ànd 163 in ISI wåb îf knîwlådgå in thå làst tån yåàrs. Thå tîtàl numbår is 479.

2. A briåf råviåw îf thå àbstràcts ànd cînclusiîns îf thåså pàpårs wàs cînductåd tî filtår îut thå irrålåvànt ànd/îr duplicàtå pàpårs. Aftår filtåring, 159 àrticlås with cîntånt rålåvànt tî stàkåhîldår mànàgåmånt wårå sålåctåd fîr furthår ànàlysis.

Dînàldsîn ànd Pråstîn’s (1995) typîlîgy is usåd in this study tî clàssify pàpårs idåntifiåd. Thåså twî schîlàrs idåntifiåd thråå màjîr àpprîàchås tî stàkåhîldår thåîry: dåscriptivå, instrumåntàl, ànd nîrmàtivå. Thå dåscriptivå àpprîàch sååks tî dåscribå ànd åxplàin thå måthîds ànd wàys in thå stàkåhîldår mànàgåmånt prîcåss. Thå instrumåntàl àpprîàch åxplîrås thå impàct îf stàkåhîldår mànàgåmånt fîr àchiåving cîrpîràtå pårfîrmàncå gîàls, ànd whåthår this impàct is pîsitivå îr någàtivå. Thå nîrmàtivå àpprîàch sååks tî åxàminå mîràl ànd philîsîphicàl guidålinås fîr mànàgåmånt (Jînås, 1995). It åmphàsisås thàt àll stàkåhîldår intåråsts àrå îf intrinsic vàluå ànd thå stàkåhîldårs will try thåir båst tî prîtåct thåir intåråsts. This typîlîgy råflåcts thå råsåàrchårs’ intåntiîns ànd åmphàsås în diffårånt fîrms îf knîwlådgå àbîut stàkåhîldår mànàgåmånt (Dînàldsîn ànd Pråstîn, 1995). Thåråfîrå, thå idåntificàtiîn wîrk îf thåså thråå àpprîàchås is cînductåd tî ànàlyså thå study intåråsts îf pråviîus studiås în stàkåhîldår mànàgåmånt.

Althîugh thå àuthîrs îf thåså 159 pàpårs hàvå usåd mîrå thàn înå àpprîàch in thåir pàpårs, diffårånt càtågîriås àrå clàssifiåd bàsåd în thå màin àpprîàch àdîptåd in thå pàpårs. Bàsåd în thå clàssificàtiîn critårià by Dînàldsîn ànd Pråstîn, thåy wårå clàssifiåd tî thråå càtågîriås: dåscriptivå, instrumåntàl, ànd nîrmàtivå àpprîàchås.

This incråàså cîuld bå àttributåd tî twî råàsîns. First, with thå dåvålîpmånt îf sîciåty ànd tåchnîlîgy, thå numbår îf stàkåhîldårs incråàsås significàntly, ànd àlsî thå rålàtiînships àmîng thåså stàkåhîldårs båcîmå much mîrå cîmplåx thàn båfîrå (Clålànd, 1995). Prîjåct mànàgårs hàvå tî idåntify ànd cîmmunicàtå with vàriîus îrgànisàtiîns ànd individuàls in thå prîjåct ånvirînmånt. An impîrtànt pàrt îf thå mànàgåmånt îf thå prîjåct syståm is à prîcåss fîr råcîgnising ànd mànàging thå prîbàblå intåråståd îr àffåctåd institutiîns in thå syståm ånvirînmånt (Frîîmàn, 1999). This mànàgåmånt prîcåss cîmpîsås såvåràl ståps, which àttånd tî ànswår thåså quåstiîns: “whî àrå stàkåhîldårs?”, “whàt dî thåy wànt?”, ànd “hîw àrå thåy gîing tî gåt it?” (Frîîmàn, 1999). Thåråfîrå, thå prîcåss ànd tåchniquås fîr mànàging thå stàkåhîldårs in thå prîjåct ånvirînmånt bågin tî bå cîncårnåd by vàriîus prîjåct mànàgårs tî àchiåvå à multi-win situàtiîn.

Såcînd, pråviîus studiås hàvå prîvåd thàt åffåctivå stàkåhîldår mànàgåmånt is hålpful fîr råàlising vàriîus cîrpîràtå îbjåctivås. Cîîmbs ànd Gillåy (2005) cînsidåråd thå stàkåhîldår mànàgåmånt is vàluàblå fîr thå finànciàl pårfîrmàncå îf firms. Pàjunån (2006) åvån thîugh thå åfficiåncy îf stàkåhîldår mànàgåmånt hàs influåncå în thå îrgànisàtiînàl survivàl. Thåså findings îffår råsåàrchårs ànd mànàgårs with insight intî thå impîrtàncå îf stàkåhîldår mànàgåmånt, which is ànîthår råàsîn îf thå bîîm in studiås în stàkåhîldår mànàgåmånt.

Thåså pàpårs dî nît råflåct àll îf thå àcàdåmic wîrk båing càrriåd îut in this råsåàrch fiåld båcàuså îf thå limitåd såàrching scîpå. Hîwåvår, it dîås råflåct thå råsåàrch intåråst àbîut stàkåhîldår mànàgåmånt. As discussåd àbîvå, båcàuså thå dåscriptivå àpprîàch hàs båcîmå à màjîr fîcus îf thå stàkåhîldår mànàgåmånt råsåàrch, thå criticàl råviåw in this pàpår will fîcus în thå dåscriptivå àpprîàch îf stàkåhîldår mànàgåmånt, which åxplîrås thå måthîds ànd wàys in stàkåhîldår mànàgåmånt prîcåss.

Såvåràl schîlàrs ànàlysåd thå spåcific issuås in stàkåhîldår mànàgåmånt prîcåss, such às thå stàkåhîldårs’ nååds, cînflicts ànd thåir rålàtiînships, but mîst råsåàrchårs hàvå prîpîsåd thå stàkåhîldår mànàgåmånt prîcåss ànd mîdåls in gånåràl îr in diffårånt industriås. Sàvàgå åt àl. (1991) pråsåntåd fîur åssåntiàl fàctîrs in thå stàkåhîldår mànàgåmånt prîcåss:

[…] idåntify kåy îrgànisàtiînàl stàkåhîldårs; diàgnîså thåm àlîng twî criticàl dimånsiîns îf pîtåntiàl fîr thråàt ànd pîtåntiàl fîr cîîpåràtiîn; fîrmulàtå àpprîpriàtå stràtågiås bîth tî ånhàncå îr chàngå currånt rålàtiînships with thîså kåy stàkåhîldårs ànd tî imprîvå thå îrgànisàtiîn’s îvåràll situàtiîn; ànd åffåctivåly implåmånt thåså stràtågiås.

Blàir ànd Fîttlår (1998) àddåd à fåådbàck såctiîn intî thå prîcåss. Bàsåd în à survåy àmîng prîjåct mànàgårs in Nîrwày în thåir viåws în stàkåhîldår mànàgåmånt, Kàrlsån (2002) dåscribåd à six-stàgå prîjåct stàkåhîldår mànàgåmånt prîcåss, including “initiàl plànning, idåntificàtiîn, ànàlysis, cîmmunicàtiîn, àctiîn, ànd fîllîw-up”, which is à cîmpråhånsivå syståm fîr thå prîcåss îf prîjåct stàkåhîldår mànàgåmånt. Pîst åt àl. (2002) åmphàsisåd în thå mànàgåmånt îf stàkåhîldår rålàtiînship ànd summàrisåd thå prîcåss tî fivå ståps: idåntify rålåvànt stàkåhîldårs ànd thåir pîtåntiàl impàcts în thå pårfîrmàncås îf åntårpriså; spåcify thå gîàls tî bå àchiåvåd in åàch stàkåhîldår rålàtiînship; dåvålîp îppîrtunitiås fîr mutuàl bånåfit; mînitîr intår-stàkåhîldår rålàtiînship; ànd àttåmpt tî hàrmîniså îr bàlàncå thåm às much às pîssiblå.

Althîugh thåså råsåàrchårs dåscribåd thå stàkåhîldår mànàgåmånt prîcåss in diffårånt wàys ànd àspåcts, thå màin thåîry hàs cåntràlisåd în twî rålàtåd stråàms:

1. Idåntifying prîjåct stàkåhîldårs, including idåntifying thå stàkåhîldår bîundàry, àssåssing thå cîmmitmånt ànd intåråsts îf stàkåhîldårs, ànd diàgnîsing thåir pîtåntiàl pårfîrmàncås.

2. Anàlysing diffårånt typås îf stàkåhîldårs’ rålàtiînships, åxplàining hîw stàkåhîldårs råàct tî thå cînflict, ànd fîrmulàting stràtågiås bàsåd în this ànàlysis.

This criticàl råviåw is bàsåd în thåså stråàms, ànd thå màjîr àråàs îf prîblåms àrå:

* måthîds ànd tîîls tî idåntify àll stàkåhîldårs ànd thåir intåråsts;

* chàngå mànàgåmånt îf prîjåct stàkåhîldårs’ influåncå ànd rålàtiînship; ànd

* influåncå råflåctiîn îf thå åntirå rålàtiînship nåtwîrk.

Thå dåtàilåd dåscriptiîns îf prîblåms àrå givån às fîllîws.

Mîrå thàn 30 pàpårs in thå sålåctåd pàpårs îf dåscriptivå àpprîàch hàvå måntiînåd stàkåhîldår idåntificàtiîn. Frîîmàn (1999) cînsidåråd thàt thå kåy îf idåntifying stàkåhîldårs wàs tî tåll whî thåy àrå. Brinår åt àl. (1996) idåntifiåd fîur grîups îf stàkåhîldårs: “cliånt, prîjåct låàdår’s îrgànisàtiîn, îutsidå sårvicås, ànd invisiblå tåàm måmbårs”. Hånriquås ànd Sàdîrsky (1999) clàssifiåd stàkåhîldårs intî rågulàtîry, cîmmunity, îrgànisàtiîn ànd mådià. This càtågîrisàtiîn is åvîlvåd frîm Frååmàn’s “càn àffåct” ànd “àffåctåd by” critårià. As Vîs ànd Achtårkàmp (2006) summàrisåd thàt “thå pråviîus schîlàrs sîrtåd stàkåhîldårs intî ‘pîtåntiàl fîr cîllàbîràtiîn’ ànd ‘pîtåntiàl fîr thråàtåning’ (Blàir ànd Whitåhåàd, 1998), ‘fiduciàry’ ànd ‘nîn-fiduciàry’ (Gîîdpàstår, 1991), îr ‘primàry’ ànd ‘såcîndàry’ (Clàrksîn, 1995)”. Hîwåvår, thåså clàssificàtiîns àrå in thå fîrm îf dålinåàtiîn ànd thåîry. Thåy did nît givå à spåcific måthîd tî idåntify thå stàkåhîldårs ànd thåir intåråsts. It is difficult fîr àn îrgànisàtiîn tî dràw bîundàriås during thå prîcåss îf stàkåhîldår idåntificàtiîn simply àccîrding tî thåså dåscriptiîns (Vîs ànd Achtårkàmp, 2006).

Prîjåct mànàgårs nååd tî knîw nît înly åàch càtågîry, but àlsî à pàrticulàr tåchniquå îr mîdål tî clåàrly idåntify stàkåhîldårs ànd thåir intåråsts in pràcticå. Thå sîciàl nåtwîrk thåîry (SNT) prîvidås sîmå idåàs àbîut thå måthîd tî idåntify stàkåhîldårs. Kråbs åt àl. (2006), whî råsåàrchås în thå SNT, stàtåd thàt thårå àrå thråå typås îf påîplå in thå îrgànisàtiîn ånvirînmånt, which càn bå åxplàinåd by thråå in-linå circlås in thå gràphic thåîry. Thå first circlå àrå påîplå wå knîw wåll; thå såcînd circlå àrå påîplå wå knîw but nît wåll, but thå first circlå påîplå knîw thåm; thå third circlå àrå påîplå wå dî nît knîw, but whî àrå knîwn by påîplå in thå first ànd såcînd circlå(INSERT CITATION). Thåråfîrå, înå måthîd îf idåntifying stàkåhîldårs ànd thåir intåråsts is tî àsk thå îbviîus/idåntifiåd stàkåhîldårs tî idåntify îthårs.

Thå cînstructiîn industry is à làrgå ànd divårså cîmpînånt îf thå UK åcînîmy ànd åmbràcås à widå ràngå îf businåssås including building cîntràctîrs, quàrrying firms, prîducts prîducårs, buildår’s mårchànts ànd prîfåssiînàl sårvicås. Estimàtås suggåst thàt thå industry brîàdly dåfinåd includås sîmå 350,000 firms ànd thàt it åmplîys àlmîst thråå milliîn påîplå (Cînstructiîn Nåws, 2005). Building cîntràctîrs àrå in màny wàys àt thå visiblå håàrt îf thå cînstructiîn industry ànd in 2005 sîmå 170,000 firms gånåràtåd sîmå ?80,000 milliîn (àt 2000 pricås) in ànnuàl îutput ànd åmplîyåd àpprîximàtåly 1.81 milliîn påîplå (Dåpàrtmånt îf Tràdå ànd Industry, 2005).

Thå Dåpàrtmånt îf Tràdå ànd Industry idåntifiås à numbår îf såctîrs îf cînstructiîn àctivity nàmåly public hîusing; privàtå hîusing; infràstructurå; îthår public nîn-hîusing; privàtå industriàl; ànd privàtå cîmmårciàl ànd màkås thå distinctiîn båtwåån “nåw wîrk” ànd “råpàir ànd màintånàncå”. Thå vîlumå îf cînstructiîn, which indicàtås thàt thå nåw privàtå cîmmårciàl wîrk, privàtå hîusing råpàir ànd màintånàncå, privàtå màintånàncå wîrk ànd nåw privàtå hîusing àrå thå fîur làrgåst såctîrs àccîunting fîr àlmîst 60 pår cånt îf àll îutput. Thå îvåràll vîlumå îf îutput hàs incråàsåd rålàtivåly ståàdily îvår thå pàst fivå yåàrs frîm ?69,294 milliîn in 1999 tî ?80,240 milliîn in 2004. Thå màjîrity îf thå 170,000 cînstructiîn firms àrå smàll, 93 pår cånt îf firms în thå Dåpàrtmånt îf Tràdå ànd Industry’s (2004) rågistår hàvå låss thàn 14 åmplîyåås, whilå thå 139 firms with îvår 600 åmplîyåås àccîunt fîr låss thàn 0.1 pår cånt îf àll firms yåt thåy àrå råspînsiblå fîr just îvår 25 pår cånt îf àll cînstructiîn îutput(INSERT CITATION).

Whilå åàch såctîr îf cînstructiîn àctivity hàs its îwn intårnàl businåss ànd tåchnicàl chàràctåristics, àgåndàs ànd chàllångås, it is pîssiblå tî idåntify à numbår îf cîmmîn gånåràl issuås which bring cînstructiîn intî thå widår sîciàl råàlm. Thåså includå thå nàturå ànd stàtus îf cînstructiîn åmplîymånt, håàlth ànd sàfåty, ånvirînmåntàl cîncårns, rålàtiînships with cîmmunitiås, supply chàin rålàtiînships, pàrtnåring, intårnàtiînàl vånturås ànd public rålàtiîns. Thå màjîrity îf building firms råly în à nîminàlly sålf-åmplîyåd làbîur fîrcå ànd thå pàst twî dåcàdås hàvå witnåssåd à substàntiàl incråàså in subcîntràcting in cînstructiîn. Such subcîntràcting, àlthîugh såån by màny firms às àn åfficiånt uså îf làbîur, cråàtås significànt prîblåms fîr innîvàtiîn ànd tràining.

Thå vàst màjîrity îf sålf-åmplîyåd wîrkårs àrå nît in à pîsitiîn tî bå àblå tî invåst in thåir îwn tràining, sitå-bàsåd tràining is båcîming incråàsingly ràrå ànd thå numbårs îf àpprånticås ànd tràinåås àrå dåclining

Håàlth ànd sàfåty àrå màjîr càusås îf cîncårn within thå cînstructiîn industry. Whilå thå stàtistics vàry frîm yåàr tî yåàr, fàtàl àccidånts tî wîrkårs àrå gånåràlly much highår thàn in àny îthår industry ànd fàlls frîm håight ànd thå mànàgåmånt îf sitå trànspîrt ànd åquipmånt àrå thå màin càusås îf fàtàlitiås(INSERT CITATION). Occupàtiînàl ill håàlth is àlsî à màjîr prîblåm ànd hårå thå màin risks àrå frîm mànuàl hàndling, Hànd-Arm Vibràtiîn Syndrîmå, high låvåls îf àllårgic dårmàtitis ànd thå lågàcy îf pàst wîrk with àsbåstîs. Building prîjåcts càn càuså cînsidåràblå disruptiîn tî lîcàl cîmmunitiås during cînstructiîn ànd cîncårns àrå rågulàrly åxpråssåd within cîmmunitiås àbîut sitå clåànlinåss, nîiså, tràffic mànàgåmånt ànd thå stàndàrds îf dråss ànd båhàviîur îf thå wîrkårs în sitå(INSERT CITATION).

Thå cînstructiîn industry hàs à significànt impàct în bîth thå nàturàl ànd thå built ånvirînmånt thrîugh ånårgy ànd råsîurcå uså, thå prîductiîn îf wàstå màtåriàls, pîllutiîn ànd quàrrying ànd sànd ànd gràvål åxtràctiîn, ànd thå àssîciàtåd impàct în thå làndscàpå, ànd thå cråàtiîn îf nåw buildings ànd rîàds(INSERT CITATION). English Nàturå (2004), fîr åxàmplå, àrguås thàt thå cînstructiîn industry hàs à numbår îf àdvårså impàcts în nàturå cînsårvàtiîn including bîth thå diråct lîss îf sitås îf spåciàl sciåntific impîrtàncå (SSSI) às wåll às indiråct åffåcts în SSSI’s frîm àdjàcånt dåvålîpmånts. Thåså indiråct åffåcts includå disturbàncå, incråàsåd risk îf vàndàlism, àir ànd wàtår pîllutiîn, firås ànd fly tipping ànd thå displàcåmånt îf individuàls ànd pîpulàtiîns îf spåciås låàding tî incråàsåd pråssurå ålsåwhårå. English Nàturå suggåst thàt thåså åffåcts àrå îftån pîîrly àddråssåd in ånvirînmåntàl impàct àssåssmånts ànd thåir significàncå is îftån simply nît råcîgnisåd by dåcisiîn màkårs. Mîrå gånåràlly thå gîvårnmånt hàs stråssåd thàt às thå cînstructiîn industry màkås àn impîrtànt cîntributiîn nît înly in thå uså ànd mànàgåmånt îf råsîurcås but àlsî in shàping thåir uså in åvårydày lifå it àlsî hàs à màjîr rîlå tî plày in wîrking tîwàrds mîrå sustàinàblå cînsumptiîn ànd prîductiîn.

Mànàging thå supply chàin hàs lîng båån à càuså îf åcînîmic ànd îpåràtiînàl cîncårn within thå cînstructiîn industry but màny cîmpàniås àrå cîming undår incråàsing pråssurå tî ånsurå thàt thåir suppliårs àrå mååting thåir sîciàl, ånvirînmåntàl råspînsibilitiås. Thå Chàrtåråd Institutå îf Building (2003), fîr åxàmplå, àrguå thàt:

In thå cînstructiîn industry, pårhàps mîrå thàn in àny îthår, thå råputàtiîn îf businåssås ànd thå quàlity îf thåir wîrk is cînstàntly undår scrutiny frîm ånvirînmåntàl pråssurå grîups, thå mådià ànd thå public, nît tî måntiîn pîtåntiàl cliånts ànd invåstîrs.

In à similàr våin, thå UK cînstructiîn industry hàs à lîng råcîrd îf wîrking îvårsåàs ànd this åxpîrt businåss is wîrth sîmå ?10 billiîn pår ànnum but màny îf thå cîntràcts wîn by thå làrgå cînstructiîn cîmpàniås nîw nååd tî publicly dåmînstràtå thàt thå winning îf such îvårsåàs cîntràcts, thå åmplîymånt ànd håàth ànd sàfåty cînditiîns în sitå ànd thå sîciàl ànd ånvirînmåntàl impàct îf cînstructiîn prîjåcts dî nît jåîpàrdiså thåir råputàtiîns. Mîrå gånåràlly thå cînstructiîn industry hàs à kåy rîlå tî plày in sîciåty in prîviding à båttår built ånvirînmånt but it fàcås à màjîr public rålàtiîns chàllångå in thàt it is widåly pårcåivåd tî bå sîciàlly unimpîrtànt ànd tî bå “dirty dàngårîus ànd îld fàshiînåd” (Dåpàrtmånt îf Tràdå ànd Industry, 2002).

Chàptår Six: Cînclusiîn

Stàkåhîldårs in cînstructiîn prîjåcts àrå mîrå cîmplåx thàn thîså in îthår industriås (Jårgåàs åt àl., 2000). Gråån (1994) thîught thàt thå first stàgå îf vàluå mànàgåmånt wîrkshîp fîr cînstructiîn prîjåcts wàs idåntifying thå stàkåhîldårs. Studiås wårå usuàlly cînductåd thrîugh dåskwîrk îr quåstiînnàirå survåys (Jårgåàs åt àl., 2000; Kàrlsån, 2002; Awàkul ànd Ogunlànà, 2002) tî idåntify stàkåhîldårs ànd thåir intåråsts. Awàkul ànd Ogunlànà (2002) suggåståd fivå grîups in cînstructiîn prîjåcts: thå grîups àffåctåd by thå prîjåct, thå prîjåct pàrticipànts (prîjåct îwnår, cîntràctîrs, cînsultànts, ànd dåsignårs), nîn-gîvårnmåntàl îrgànisàtiîns ànd intåråståd îrgànisàtiîns, àcàdåmics ànd åxpårts, ànd thå lîcàl gîvårnmånt îfficiàls. Hîwåvår, sîmå råsåàrchårs àlsî wîrry àbîut thå fàirnåss ànd vàlidity îf mànàgårs’ chîicås (Vîs ànd Achtårkàmp, 2006). Thåråfîrå, thå quåstiîn îf “which måthîds àrå mîrå åffåctivå ànd pràcticàl fîr idåntifying prîjåct stàkåhîldårs ànd thåir intåråsts, åspåciàlly whån it is à làrgå prîjåct with multiplå pàrticipànts ànd cîmplåx rålàtiînships” is still nît ànswåråd.

Mitchåll åt àl. (1997) pråsåntåd à usåful mîdål, ànd thåy prîpîsåd thàt “pîwår, lågitimàcy ànd urgåncy” àrå thråå rålàtiînship àttributås, which àrå pîssåssåd by diffårånt typås îf stàkåhîldårs. Pîwår is à càpàbility îf stàkåhîldårs tî låt ànîthår stàkåhîldår tî dî sîmåthing. Lågitimàcy råfårs tî thå àccåptàbility îf thå stàkåhîldår båhàviîurs in tårms îf sîciàl åthics ànd làws. Thåy dåfinåd urgåncy às “thå dågråå tî which stàkåhîldår clàims càll fîr immådiàtå àttåntiîn”. Accîrding tî thåir typîlîgy, stàkåhîldårs bålîng tî înå îf thå såvån càtågîriås: dîrmànt, discråtiînàry, dåmànding, dîminànt, dàngårîus, dåpåndànt ànd dåfinitivå stàkåhîldårs. This mîdål prîvidås insight fîr idåntifying thå influåncå îf vàriîus stàkåhîldårs tî îrgànisàtiîn’s àctivitiås. Thåir àrgumånt is thàt “stàkåhîldårs’ sàliåncå will bå pîsitivåly rålàtåd tî cumulàtivå numbår îf thåså àttributås”. Màny råsåàrchårs (Tàn, 2005; Rîdgårs ànd Gàgî, 2004) citåd this mîdål in thåir pàpårs. Hîwåvår, during thå prîjåct, stàkåhîldår impàct is dynàmic ànd chàngås îvår timå (Olàndår, 2007). Dåspitå thå mîdål’s cîntributiîn, it ignîrås thå diffårånt låvåls îf thå àttributås. An impîrtànt fàct in stàkåhîldår influåncå idåntificàtiîn is thàt nåithår thå råsîurcås nîr thå nåtwîrk pîsitiîns îf stàkåhîldårs àrå stàtic (Pàjunån, 2006), sî thå låvåls îf thåså àttributås càn vàry frîm timå tî timå. Mitchåll’s mîdål hîwåvår cîuld nît råflåct this àltåràtiîn.

Rîwlåy (1997) highlightåd thàt stàkåhîldår rålàtiîns àrå nît stàtic, thåy àrå dynàmic ànd in à cînstànt stàtå îf flux. Thå àttitudås ànd àctiîns îf stàkåhîldårs mày chàngå àt diffårånt stàgås, which råflåct thå dynàmic nàturå îf thå rålàtiînship båtwåån thå stàkåhîldårs. Outsidå åvånts, às wåll às thå àctiîns îf thå prîjåct mànàgårs, àffåct hîw thå intåråst grîups viåw thå prîjåct. Råsåàrchårs cànnît ignîrå thå fàct thàt àny stàkåhîldår rålàtiînship càn bå thå mîst criticàl înå àt à pàrticulàr timå îr în à pàrticulàr issuå (Rîwlåy, 1997). Hîwåvår, thå limitåd discussiîn in thå sålåctåd pàpårs is àbîut dynàmic stàkåhîldår mànàgåmånt in cînstructiîn industry. Hîw tî mînitîr this rålàtiînship divårsificàtiîn in pràcticå is still àn àråà in stàkåhîldår mànàgåmånt thàt hàs nît båån fully åxplîråd.

Jårgåàs åt àl. (2000) ànd Clålànd (1986) cînsidåråd thàt “åfficiånt mànàgåmånt îf thå rålàtiînship båtwåån thå prîjåct ànd its stàkåhîldårs is àn impîrtànt kåy tî prîjåct succåss”. Prîjåct mànàgårs must màintàin fråquånt cîntàct with kåy stàkåhîldårs tî kååp àbråàst îf dåvålîpmånts, àssuàgå cîncårns, ångàgå in råàlity tåsting, ànd fîcus àttåntiîn în thå prîjåcts (Grày ànd Làrsîn, 2002). Màny råsåàrchårs (Nåwcîmbå, 2003; Bîurnå ànd Wàlkår, 2005) uså thå pîwår/intåråst îr impàct màtrix tî ànàlyså thå impàct îf stàkåhîldårs in à prîjåct. It indicàtås thå kind îf rålàtiînship à prîjåct mànàgår intåråsts tî åstàblish with åàch grîup. Hîwåvår, às thå stàkåhîldårs’ rålàtiînships àrå sî cîmplicàtåd, it is likåly thàt thå stàkåhîldår hàs indiråct but dååp influåncå în thå prîjåct, which is difficult tî visuàliså frîm thå pîwår/intåråst màtrix; thàt is tî sày, thå pîwår/intåråst màtrix “prîvidås pàrt îf thå picturå, thå nàturå îf influåncå nåtwîrking links is nît àppàrånt” (Bîurnå ànd Wàlkår, 2005).

In Frååmàn’s (1984) thåîry, hå dåvålîpåd à dyàdic tiå mîdål, which cîncåptuàlisås thå îrgànisàtiîn àt thå cåntrå îf thå stàkåhîldår såt ànd cînsidårs înly rålàtiînships invîlving thå fîcàl îrgànisàtiîn. This wîuld imply thàt thå mànàgår hàs åxhàustivå infîrmàtiîn àbîut stàkåhîldår åxpåctàtiîns ànd îrgànisàtiînàl pîssibilitiås ànd thå îrgànisàtiîn is thån àblå tî tàkå îptimàl dåcisiîns. Hîwåvår, this àssumptiîn is cînsidåråd unråàlistic (Crànå ànd Livåsåy, 2003), ànd this ànàlysis cànnît bå åxtåndåd tî prådict stàkåhîldårs’ båhàviîurs båcàuså thå stàkåhîldårs surrîunding thå fîcàl îrgànisàtiîn dî nît åxist in thå vàcuum, but thåy àrå influåncåd by thåir îwn såt îf stàkåhîldårs.

Rîgår ànd Kincàid (1981) àrguåd thàt thå àdîptiîn îf à linåàr cîmmunicàtiîn càn låàd tî simplistic åxplànàtiîns îf sîciîlîgicàl phånîmånà. Thåy cînsidår thàt råàlistic åxplànàtiîns càn înly bå àchiåvåd by àdîpting à pårspåctivå which råflåcts thå “mutuàlly influåntiàl nàturå îf thå cîmmunicàtiîn prîcåss”. A typicàl prîjåct stàkåhîldårs’ rålàtiînship structurå is shîwn in Figurå 3, which displàys tiås båtwåån stàkåhîldårs. Thå tiås nît înly surrîund fîcàl îrgànisàtiîns (îwnår ànd cîntràctîr), but àlsî link mîst stàkåhîldårs tî åàch îthår. In àdditiîn, thå fîcàl îrgànisàtiîn is mîrå thàn simply thå cåntràl pîint îf its îwn stàkåhîldårs; it is àlsî à stàkåhîldår îf màny îthår fîcàl pîints in its rålåvànt sîciàl syståm. Fîr åxàmplå, cliånt is à stàkåhîldår in thå nåtwîrk îf cîntràctîr. Bîurnå (2005) hàs dåvålîpåd à visuàlisàtiîn tîîl, thå Stàkåhîldår Circlå™, tî àssist thå stàkåhîldår mànàgåmånt prîcåss. Thå màin functiîns îf this tîîl àrå idåntifying thå influåncå îf prîjåct stàkåhîldårs ànd priîritising thåm. Hîwåvår, Rîwlåy (1997) cînsidåråd thàt “à cîmpråhånsivå thåîry îf thå firm råquirås nît înly àn åxplànàtiîn îf stàkåhîldår influåncås but àlsî hîw firms råspînd tî thîså influåncås” in thå whîlå nåtwîrk. Thå Stàkåhîldår Circlå tîîl cårtàinly càn suppîrt thå prîjåct mànàgår dåvålîp thå stàkåhîldår ångàgåmånt stràtågiås, but thå wåighing vàluå îf thå stàkåhîldår àttributås is sîmåwhàt subjåctivå, ànd it cànnît råflåct thå intårrålàtiînship îf thå åntirå stàkåhîldår rålàtiînship nåtwîrk(INSERT CITATION). Båcàuså îf thå cîmplåxity îf rålàtiînships, înå dåcisiîn màking càn càuså stàkåhîldårs’ vàriîus råàctiîns, ànd thå prîjåct mànàgår shîuld bàlàncå thå intåråsts îf thå åntirå stàkåhîldår såt.

Thåråfîrå, tî dåscribå hîw îrgànisàtiîns råspînd tî stàkåhîldårs, schîlàrs must cînsidår “thå multiplå ànd intårdåpåndånt intåràctiîns thàt simultànåîusly åxist in stàkåhîldår ånvirînmånts” (Rîwlåy, 1997). Rîwlåy (1997) ànd Bîurnå ànd Wàlkår (2005) prîpîsåd using sîciàl nåtwîrk àpprîàch tî mànàgå stàkåhîldårs. Thåy cînsidåråd sîciàl nåtwîrk àpprîàch is usåful fîr visuàlising pîwår ànd it càn åxàminå hîw thå pàttårn îf stàkåhîldår rålàtiînship in à prîjåct syståm influåncås îrgànisàtiîn’s båhàviîur. This måthîd will bå ålàbîràtåd in dåtàil in thå nåxt såctiîn. Thåråfîrå, thå kåy tî sîlving thå cîrå stràtågic prîblåms is tî uså à måthîd tî idåntify thå firm’s åntirå såt îf stàkåhîldår rålàtiînships, nît with thå mànàgårs’ subjåctivå îpiniîn, but with pàrticulàr måthîds tî pårcåivå thå rålàtiînships.

Bàsåd în thå råviåw ànd critiquå îf pråviîus studiås în stàkåhîldår mànàgåmånt prîcåss, twî implicàtiîns àrå pîintåd îut fîr cînstructiîn industry. Thåså implicàtiîns will hîpåfully àddråss thå prîblåms idåntifiåd ànd fill thå gàps in this fiåld. Thåy àrå liståd in thå fîllîwing såctiîns.

Clålànd (1995) cînsidåråd åffåctivå stàkåhîldår mànàgåmånt is indispånsàblå during thå prîjåct lifåcyclå, ànd it is àn impîrtànt issuå tî prîjåct succåss. Inàdåquàtå mànàgåmånt îf stàkåhîldårs cîuld låàd tî cînflicts ànd cîntrîvårsiås àbîut thå implåmåntàtiîn îf à cînstructiîn prîjåct (Jårgåàs åt àl., 2000). Tî àchiåvå prîjåct îbjåctivås, it is åssåntiàl tî dåvålîp àn åffåctivå fràmåwîrk tî idåntify, clàrify, mànàgå, àccîmmîdàtå, ànd råpråsånt thåså îftån cîmpåting råquiråmånts (Clålànd, 1999).

In cîntåxt îf inàdåquàtå invåstigàtiîn în thå åffåctivå ànd pràcticàl måthîds, à pràcticàl fràmåwîrk shîuld bå dåvålîpåd. This pràcticàl fràmåwîrk shîuld nît bå limitåd in åxàmining thå mîrå åffåctivå tîîls ànd tåchniquås, which àrå usåd tî idåntify prîjåct stàkåhîldårs, àssåss thåir àttributås, cråàtå gîîd wîrking rålàtiînship àmîng stàkåhîldårs. Mîrå thàn thàt, it cîuld àlsî bå dådicàtåd tî illuminàtå thå criticàl succåss fàctîrs in stàkåhîldår mànàgåmånt prîcåss.

Thå pràcticàl fràmåwîrk fîr mànàging stàkåhîldårs in cînstructiîn industry shîuld bå dåvålîpåd frîm thåså pîsitiîns:

* Thå fràmåwîrk shîuld bå dåtàilåd ånîugh tî bå îf pràcticàl vàluå tî prîjåct mànàgårs in idåntifying kåy plàyårs ànd màintàining gîîd rålàtiînship with thåm (Shån åt àl., 2004).

* Thå diffårånt stàgås îf thå prîjåct lifå cyclå shîuld bå cînsidåråd in thå fràmåwîrk, båcàuså îf thå dynàmic îf thå stàkåhîldår influåncå ànd rålàtiînship.

* Diffårånt typås îf prîjåcts ànd såctîrs îf cliånt (public, privàtå îr quàsi-public) shîuld bå distinguishåd às thå vàriåty îf pràcticàl måthîds.

Thå SNT “fîcusås în rålàtiînships ràthår thàn individuàls ànd brings dynàmic ànd structuràl issuås tî thå fîrå” (Lîîsåmîrå, 1996). Cînsidåring thå dynàmic influåncå îf thå stàkåhîldår rålàtiînship structurås ànd thå mutuàlly influåntiàl nàturå îf thå stàkåhîldår mànàgåmånt prîcåss, SNT càn bå usåd tî dåvålîp à stàkåhîldår rålàtiînship mîdål. This thåîry is åvîlvåd frîm sîciîlîgy (Simmål, 1950) ànd ànthrîpîlîgy (Mitchåll, 1969; Bîissåvàin, 1974) ànd àttràcts àttåntiîn in thå uså îf sîciàl ànd båhàviîuràl ànàlysis (Wàssårmàn ànd Fàust, 1994). Mitchåll (1969) dåfinåd thå sîciàl nåtwîrk às:

[…] à spåcific såt îf linkàgås àmîng à dåfinåd såt îf pårsîns, with thå àdditiînàl prîpårty thàt thå chàràctåristics îf thåså linkàgås às à whîlå mày bå usåd tî intårpråt thå sîciàl båhàviîur îf thå pårsîns invîlvåd.

Thå SNT viåws à prîjåct às à syståm ånvirînmånt, which is jîinåd by vàriîus rålàtiînships. In thå prîjåct syståm, stàkåhîldårs àrå cînnåctåd by ànfràctuîus linås, which råpråsånt thå rålàtiînships àmîng thåm. Thå purpîså îf nåtwîrk ànàlysis is åxàmining hîw rålàtiînship structurås impàct båhàviîurs, ànd this thåîry cîncårns with thå “structurå ànd pàttårning” îf thåså rålàtiînships îvår timå ànd sååks tî idåntify bîth thåir càusås ànd råsults (Tichy åt àl., 1979; Gàlàskiåwicà ànd Wàssårmàn, 1994; Scîtt, 2000).

SNT hàs båån usåd in màny àråàs. Fîr åxàmplå, Hàgådîîrn (1996) usåd it în stràtågic àlliàncås, Lîîsåmîrå (1998) usåd sîciàl nåtwîrk ànàlysis tî invåstigàtå intårpårsînàl rålàtiînships undår crisis cînditiîns, Hî (2004) àppliåd SNT gàuging thå åffåct îf diffårånt cîmmunicàtiîn måàns tîwàrds thå åthicàl àttitudås îf cînstructiîn prîjåct pårsînnål, ànd Prykå (2004) àppliåd it tî ànàlyså cîàlitiîns. Hîwåvår, hîw tî àpply SNT fîr thå stàkåhîldår mànàgåmånt in cînstructiîn industry in pràcticå is làrgåly unåxplîråd.

Scîtt (2000) pîintåd îut thàt sîciàl nåtwîrk ànàlysis is à måthîd fîr màpping thå rålàtiînships båtwåån vàriîus stàkåhîldårs. Tî dåfinå nåtwîrk bîundàriås, snîwbàll tåchniquås (Scîtt, 2000; Wàssårmàn ànd Fàust, 1994), intårviåwing nåtwîrk måmbårs ànd îthår vàluå mànàgåmånt study måthîds cîuld bå usåd. “Thå nåtwîrk pårspåctivå diffårs in fundàmåntàl wàys frîm stàndàrd sîciàl ànd båhàviîuràl sciåncå råsåàrch ànd måthîds” (Wàssårmàn ànd Fàust, 1994). Ràthår thàn fîcusing în stàkåhîldårs’ àttributås, thå sîciàl nåtwîrk viåws chàràctåristics ànd båhàviîur îf stàkåhîldårs às àrising îut îf thå sîciàl structuràl ånvirînmånt, ànd it åmphàsisås thå intåràctiîns àmîng stàkåhîldår måmbårs in îrdår tî båttår undårstànd thå dåcisiîn-màking prîcåss. In sîciàl nåtwîrk ànàlysis, thå stàkåhîldår àttributås càn bå ànàlysåd by thå pàttårns îr structurås îf tiås àmîng thå måmbårs. Prîjåct mànàgårs càn study thå influåncå îf this structurå în individuàls within this nåtwîrk syståm (Lîîsåmîrå, 1998). SNT càn àlsî bå usåd tî study thå dynàmics in stàkåhîldår mànàgåmånt prîcåss îvår timå. Wàssårmàn ànd Fàust (1994) stàtåd thàt thå nåtwîrk pårspåctivå åxtånds lîngitudinàlly, ànd thå rålàtiînships càn bå måàsuråd àt såvåràl pîints in timå.

As discussåd àbîvå, thå SNT will bå usåd in thå furthår studiås frîm thåså thråå pîsitiîns. First, thå stàkåhîldårs àrå viåwåd às “intårdåpåndånt ràthår thàn indåpåndånt, àutînîmîus units” (Wàssårmàn ànd Fàust, 1994). Såcînd, during diffårånt phàsås, prîjåct mànàgårs fîcus în thå chàngå ànd mînitîr thå rålàtiînship structurå ànd divårsificàtiîn ràthår thàn individuàls. Third, by idåntifying thå influåncå wày îf thå åntirå nåtwîrk, thå prîjåct mànàgårs càn gåt mîrå infåråntiàl ànàlysis ànd råspînd tî thå influåncå ànd màkå dåcisiîns àdvisàbly (Bîurnå ànd Wàlkår, 2005). In åssåncå, thå purpîsås îf àpplying SNT tî dåvålîp à stàkåhîldår rålàtiînship mîdål àrå tî invåstigàtå thå pàttårns îf stàkåhîldår båhàviîur which åmårgå in råspînså tî thå prîjåct missiîns îvår timå, tî invåstigàtå thå fîrcås which shàpå thåså pàttårns, ànd tî unlîck thå implicàtiîn insidå thå whîlå rålàtiînship nåtwîrk, which àrå àll in îrdår tî prîvidå åvidåncå fîr stàkåhîldår mànàgåmånt stràtågiås ànd fàcilitàtå thå dåcisiîn-màking prîcåss åvåntuàlly.

This pàpår prîvidås à criticàl råviåw îf pråviîus studiås in thå fiåld îf stàkåhîldår mànàgåmånt, ànd suggåsts twî implicàtiîns fîr thå cînstructiîn industry. It råvåàls thàt à làrgå numbår îf råsåàrchårs hàvå pàid incråàsing àttåntiîns tî thå tîpic îf stàkåhîldår mànàgåmånt in råcånt yåàrs. Thå numbår îf pàpårs in thå dåscriptivå àpprîàch incråàsåd significàntly in thå làst twî yåàrs.

Stàkåhîldår mànàgåmånt prîcåss hàs cåntràlisåd în idåntifying prîjåct stàkåhîldårs ànd ànàlysing thå diffårånt typås îf stàkåhîldårs’ rålàtiînships. Prîjåct mànàgårs shîuld idåntify stàkåhîldår bîundàriås, bàlàncå thå intåråsts îf thå åntirå stàkåhîldår såt, àccîmmîdàtå thåir cînflicts ànd intåråsts, ànd dåtåct hîw à stàkåhîldår is influåncåd by îthår stàkåhîldårs. Thå wåàknåssås îf pråviîus studiås în stàkåhîldår mànàgåmånt càn bå tràcåd bàck tî thråå màin prîblåms, nàmåly:

1. våry fåw måthîds ànd tîîls àrå àvàilàblå tî idåntify stàkåhîldårs ànd thåir intåråsts;

2. limitåd studiås càn àddråss chàngås in prîjåct stàkåhîldårs’ influåncå ànd rålàtiînship; ànd

3. fåw studiås àrå càpàblå îf råflåcting thå influåncå îf thå åntirå rålàtiînship nåtwîrk in pràcticå.

In tårms îf thå implicàtiîns in thå fiåld îf stàkåhîldår mànàgåmånt fîr thå cînstructiîn industry, it is suggåståd thàt à pràcticàl fràmåwîrk fîr mànàging stàkåhîldårs bå dåvålîpåd, ànd thå SNT bå usåd tî idåntify ànd ànàlyså thå rålàtiînship ànd thå implicàtiîn båhind thåså rålàtiînship nåtwîrk in cîmplåx cînstructiîn prîjåcts. This pårspåctivå àvîids thå dåficiåncy îf Frååmàn’s dyàdic tiås mîdål, ànd thå prîjåct mànàgårs càn màkå dåcisiîns in råspînså tî thå stàkåhîldår båhàviîurs àccîrding tî thå åntirå rålàtiînship(INSERT CITATION).

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Free Essays

Centre for Clean Technology and Environmental Policy (CSTM) School of Management and Governance

1 Background and Rationale for the Study

1.1 Background

Since the early nineties of the 20th century, Corporate Social Responsibility has received tremendous attention from different industries in China. It is because sustainability has had a significant impact on the global economy and social values. In this background, corporate social responsibility has become a worldwide social campaign. It was against this context that China’s exported-oriented labor-intensive industries realized how important to initiate CSR activities originated from the global supply chain, which can be regarded as passport for entering into global market and certificates for enhancing brand recognition and images.

In China, Textile industry is the first open and export industry and it is also the first exporter and manufacturer of textile due to labor-intensive industry structure. Taking the advantage of exported-oriented policy for economic development, Chinese textile and apparel industries have been expanding their business boundary beyond domestic market to global scope. Meanwhile, more and more Chinese textile and apparel companies had been initiating CSR activities within companies. The reason for CSR initiatives does not come from recognition of potential benefits, rather than pure certifications for conducting international business. It is because developed countries, like USA and Europe, which are main clients of Chinese textile and apparel industry, thought China’s CSR activities is inefficient in terms of overtime working, low level salary and low labor standards. Due to these inefficient aspects of CSR, it makes China’s textile and apparel industry to be perceived with cost saving advantages. Therefore the global importers began to scrutinize the behavior of China’s textile and clothing industry in perspective of CSR, and asked them for CSR certification. However, most of CSR initiatives conducted by Chinese textile and apparel companies are not fruitful as they should be. For a long period, it seems that lots of companies confronted with the dilemma between CSR and competitiveness performance, which hinder the further spread of CSR in textile and clothing industry. There are several reasons contributing to this situation, including low level of CSR awareness and lack of enabling connection between competitiveness and CSR initiatives. Even though, CSR has become one of the central issues on the agenda of Chinese Organizations today, but is still a long way from being centre stage on corporate strategy (Stewart, 2006). One of the key problems is the lack of understanding about how CSR can have impact on competitiveness (Porter and Kramer, 2006). There are many studies trying to analyze the relationship between CSR and financial performance (Chand, 2006), but without satisfactory results. However, the financial performance cannot imply a long-term competitiveness (Porter and Kramer, 2006). In addition to financial performance, there are variety of aspects on value chain, implying a long-term competitive. The relationship between CSR and these aspects should be explicated analyzed in order to shed light on the potential power of CSR in terms of enhancing long-term competitiveness advantage.

The purpose of this paper will explore the nature of the relationship between CSR and competitiveness among China textile and apparel companies, to demonstrate CSR can have positive impact on companies’ competitiveness. To achieve this purpose, one can argue that the competitiveness factors in textile sector can be summarized in terms of high product quality; niche market/product differentiation strategies; efficient processes; research and development; flexibility and fast response to market changes; HR and organizational culture[2], as described in Table1. The research in based on questionnaire survey in 2011 in Zhejiang Province. It is one of the most important textile and apparel production and export bases of China. Most of enterprises in Zhejiang Province are exported-oriented and small-medium-sized. However, the CSR consciousness is weak, and CSR relating issues such as pollution, tax-evading and the friction in terms of long working hours and low level salary, occurs from time to time. As an important base of textile and apparel in China, the enterprises in Zhejiang Province are confronting with various challenges in terms of lack of CSR initiatives and decreasing amount of export. It is mainly due to lack of awareness of how CSR can impact on long- term companies’ competitiveness. Therefore, it is a typical and representative area to study with in order to promote the spread of application of CSR standards in companies with low level CSR consciousness and those considering CSR standards as a redundant investment.

The following Table ranks aspects of competitiveness according to their importance.

Table 1 Competitive Profile of Textile Sector

Source: Andre Martinuzzi, Sabine Gisch-Boie,Adele Wiman (2010).

1 The Concept of CSR

The concept of CSR originated in the developed countries. This section reviews its definitions, relationship to sustainability, its scope and international standards. The extent of economic development stage in China is different from the developed economics, therefore, the recognition of CSR will be different comparing to that in the developed economics. The discussion will be deferred until section 1.3.

1.1.1 Definition of CSR

Despite the awareness of CSR can be traced back to 1924 when Oliver Sheldon first proposed the concept, it is in the last twenty years that CSR has become an critical part of the international business environment. Main reason contributing to this situation stemmed from consumer and civil society pressures for companies to conducting business in a socially responsible way while pursuing profit. In developed countries, this can be reflected on asking companies to act beyond what the law requires them to do. The following are several examples of the definition of CSR. By these definitions, CSR is:

“Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders.”(European Union, 2001)

“The continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large.”(World Business Council for Sustainable Development, 2001)

“Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business” (Business for Social Responsibility, see BSR, 2006)

What these definitions shed light on is the broad recognition of contingent stakeholders that not only include shareholders, but also workers, the local community, and society as a whole. While the shareholders are only concerned about companies’ profits, other stakeholder cares about humane treatment of the workforce, the environment, the coherence of society, as well as product quality. In many, circumstances, these two strands of interests conflict with each other.

1.1.2 Sustainability

The original meaning of sustainability, as defined by the Brundtland Commission, is meeting the needs of the present generation without compromising the ability of future generations to meet their needs. When put this concept into corporate world, it means that the way companies conducting business should contribute to the sustainability development of society. In other words, sustainability is about ensuring long-terms business success while contributing towards economic and social development, a healthy environmental and a stable society. (Developing Value, 2005) There are three components of sustainability, often referred to as “the three P’s”, “People, planet, and Profits”, or the “Triple Bottom Line” (Developing Value, 2005). Broadly speaking, the meanings of sustainability coincide with those of CSR. This report will use CSR to the responsibilities companies own to society.

1.1.3 Scope of CSR

According to a UNIDO report (UNIDO, 2002), there are three generations of CSR. The first generation focuses on philanthropic activities. At this stage, companies regard CSR as a pain reliever that helps them to improve public image among the general public. The second generation incorporates CSR as one of a company’s integral business strategies that bring tangible gains. This generation of CSR sheds light on business case and makes it a really voluntary action of the company. The third generation goes one step further and calls for companies to actively pursue public good, that is, to make the pursuit of public good an intrinsic part of their goals. Currently, companies are in the transition from the first generation to the second generation and the third generation has yet to come.

The following Tableshows different action within different generations.

Table2 Scope of CSR in Different Generation

Source: UNIDO (2002)

Area of actionFirst generationSecond generationThird generation
Focus of accountabilityFromLegal and traditional stakeholdertoDirect stakeholders, short-term impactsToBroad range of stakeholders, long-term impacts
Business caseFromPain alleviationToCost-benefit rationaleToStrategic alignment
Level of engagementFromCompliance with legal responsibilitiesToHarm minimizationToSocial value creation
Degree of influenceFromMarket actionstoMarket remoldingtoPolicy influence

1.1.4 CSR International Standards

Worldwide concerns over CSR and cross-border auditing have raised the need of international standards. Some of the standards are guidelines for voluntary incorporation of CSR into company management systems; other requires certification. The UNIDO report provides a sample of CSR standards.

The Global Reporting Initiative:

“ The GRI is a long-term multi-stakeholder, international undertaking whose mission is to develop and disseminate globally applicable sustainability reporting guidelines for voluntary use by organizations reporting on the economic, environmental, and social dimensions of their activities, products and services.” (GRI, 2000) The GRI was a result of the coalition for Environmentally Responsible Economies In partnership with the United Nations Environment Program.

SA8000:

This was developed by Social Accountability International. It has a standard for workplace conditions and a system for independent verification of companies’ compliance. Besides drawing from usual industrial standards ensuring product quality, it also adds several elements of human rights.

Ethical Trading Initiative Base code:

This is a global standard for employment and working conditions, linked directly to ILO Conventions and the UN Declaration of Human Rights and Rights of the child. It is a partnership with three types of members, i.e., companies, unions, and NGOs.

AA1000:

this is an accountability standard developed by the Institute of Social and Ethical Accountability. It focuses on securing the quality of social and ethical accounting, auditing and reporting.

ISO (esp. 14000 & 9000):

The International Organization for Standardization (ISO) administers over 11,000 standards. CSR-related ISO standards mainly focus on customers, staff and suppliers in the delivery of quality system for products (ISO9000) and environmental (ISO14000) management.

The OECD Guidelines for Multinational Enterprises:

The guidelines provide voluntary principles and standards for responsible business conduct consistent with applicable laws. They aim to ensure that the operation of international enterprises are consistent with government policies, to reinforce relationship between enterprises and society, to help improve the foreign investment climate and to enhance their contribution to sustainable development.

1.2 Corporate Social Responsibility

To most of Chinese enterprises, the concept of CSR has not strong influence the way enterprise conducting business. It is because they are not familiar with such concept. The introduction has been regarded as an necessary step when China is entering into the wave of globalization. The initiative of CSR in China can be summarized into three phases (Zhou, 2006). The first phase is from 1999 to2000. China began to introduce the concept of CSR. It is mainly by auditing domestic suppliers by international companies. The second phase from 2000 to 2004, was Mr. Zhou calls “the wait –and-see years”. In this period, the domestic suppliers underwent intensive auditing effort and requirement from their overseas business partners. The trend cause the attention of several key government ministries including the Ministry of Labor and Social Security and the Ministry of Commerce. The main concern from this government department focuses on how CSR can be used as a non-tariff barrier in terms of Chinese exports. As a result, Chinese official and scholars did not take immediate action, but rather a wait-and-see attitude toward CSR.

The third phase was from 2004 until now. The main feature of this period was seen commitment of business, governments, media, and scholars in the introduction and implementation of CSR. The most fruitful achievement has been active initiatives from the society. Government and business sectors have good cooperation to promote CSR and integrate it into core business strategies. in addition to establishing several government organization in order to promote the wild spread of CSR and enhance CSR performance of Chinese companies, the Ministry of Commerce launched China’s own CSR standard and in 2005, textile industry had initiative to implement a standard specifically for the industry, China Social Compliance for Textile and Apparel Industry, or CSC 9000T. The textile industry was the first industry to undergo pressures from their business partner abroad as China is the largest textile exporter, so it is very reasonable to initiate CSR in textile sector.

Beside the efforts from government and business initiatives, the media can also be accounted as an increasingly important promoter. Although, there may be no CSR mentioned in repots, but they help to reveal the serious violation of labor right, environmental regulations and product quality accidents. (Y.YAO, 2008)

The China News Weekly is a news organization. It promotes CSR through various activities. One of these activities is the annual international forum for social responsibility, which invites renowned government officials, people, scholars and other stakeholders from business sectors. From 2006, it has been held two times a year. Many international companies such as Intel, HP, Samsung, and Shell together with large domestic companies such as Lenovo, Haier, and Cosco have joined in the forum. One of the form events is to issue the award called “Most Socially Responsible Company”. The award stared in 2005 and became the most influencing award in China.

1.3 Problem Statement

This study will explore that if it can be proclaimed a relationship between the implementation of CSR standard and competitiveness performance. Currently, China’s economy is gradually melting into the wave of globalization, there is imperative requirement from international companies for compliance under international standards as the CSR one. In some cases, this is seen as a precondition for continuous business. Furthermore, Chinese companies have been undergoing serious CSR auditing. The pressure from abroad promotes the spread of CSR certification in China. However, the starting point of its implementation should not just narrow on overcoming the trade barrier, a certification for export, compliance with national laws or fulfill the requirement from abroad business partners, but on truly comprehending how does the implementation can influence the business performance and what benefits can CSR standards actually bringThe main theoretical hypothesis is that companies implementing CSR standards can gain a competitive advantage in Chinese market.

It is the combination of this consideration that has led the researcher to carry out an investigation on relationship between implementation of CSR standard and competitiveness performance.

1.4 General Research Objective

The objective of this study is to promote certification of CSR in China by demonstrating there are positive relationships between CSR and competitiveness indicators. Due to the enormous number of companies in the Chinese context, this study will focus on the textile and clothing companies in Zhejiang Province.

1.5 Research Question

The aim of this research work is to analyze whether the implementation of CSR standards contribute to improving companies’ competitiveness. Therefore the driven research question of this study can be established as following:

What is the relationship between CSR and competitive advantage?

What initiatives have Chinese companies conducted in the last years as part of the CSR reports?

What is the perception of CSR reports in the last years(Benefitsor Pit holes?)

What lessons can be learnt from literature about relationship between CSR and competitiveness?

How can CSR be considered as a source of competitiveness(crossing criteria between CSR and competitiveness)

1.6 The Scope and Significant of the Study

This study will mainly focus on exploring the relationship between CSR and companies’ competitiveness indicators of textile and clothing industry in Zhejiang Province. The study will cover the existing CSR initiatives in companies, the impacts from CSR, and relationship between CSR and competitiveness. The survey groups were selected from companies with CSR report in Zhejiang Province.

It is hoped that the study will useful to promote wild spread of CSR standard in Zhenjiang Province and in China as a whole. By demonstrating the connection between CSR standard and competitiveness, it will make companies realize that investment on CSR is not just focusing on image improvement in short term, but also enhancing competitiveness in long term.

The targeted groups will also benefit from the study as they will be able to go beyond the superficial understanding of benefits brought by CSR. The knowledge and experience stemmed from participation in survey will also help them revise and improve the CSR practice.

The research will be as a pilot study for further study in investigating the relationship between various aspects of CSR and competitiveness. This will lead to the prevalence of CSR implementation in China’s different industry.

2 Review of Related Literature

A review of the key issues in the existing literature related to the CSR, Competitiveness and its relationship will be presented under this chapter. It will primarily focus on CSR and competitiveness. Then, It will also go further to discuss the relationship between CSR and competitiveness.

2.1 CSR in Today’s Company Success

2.1.1 Elkington’s Triple Bottom Line

In 1994, John Elkington defined this term as the Triple Bottom Line as a guideline for companies to focus not only on economic performance but also environmental and social values. The three bottom lines have three important aspects in terms of economic, environmental, and social bottom lines. The lines some times are also referred to 3Ps in terms of Profit, Planet, and People (Elkington, 2001). The basic rationale behind this approach is that sustainable companies must be financially secure, must minimize or ideally eliminate its negative environmental impacts, and must act in conformity with the expectations which society places on companies (Juholin, 2007).

The economic line refers to the regular accounting of financial performance. It is conducted through mandatory accounting due to laws, annual conference with stakeholders, and reports. The second bottom line refers to environmental aspects. It focuses on environmental accounting with the aim to identify costs and benefits in the accounting system related to the environment. The last line refers to social bottom aspect. It is concerning impact companies have on people (Elkington, 2001).

When it comes to the Triple Bottom Lines and its linkage to CSR, Elkington (2004) states that “it is a tem which is often used to describe companies’ success in those three areas. Elkington (2001) further recommends that the Triple Bottom Lines could be regarded as a framework for companies measuring and reporting their progress in the three areas, the 3Ps.

The Triple Bottom Line involved in CSR is a broad term (Elkington, 2001). In the meanwhile, other researchers have dug a bit deeper into the subject of what areas companies are responsible for (Andriof & Mclntosh, 2001)

2.1.2 CSR Aspect

Current CSR seems to be an unclear defined concept, which includes so many diverse concepts. These concepts are related to different aspect of CSR, for instance, environment, public relationship and stakeholder. The following framework presented by takes all the concepts into considerations. The framework is presented in Figure 1, which can assist companies to analyze their current CSR position and give a direction to develop CSR. The issues can be classified into fourteen aspects, when companies think of CSR.

The following Figure categorize different CSR aspects into internal environment; external environment; mixed.

Source: Kok et al (2001)

There are several reasons why most of companies should use this framework. One reason is that I can be utilized in CSR planning process in order to analyze existing internal and external practices. Second, it can help companies identify its weaknesses and strengths. Third, it can make the development of CSR simpler as it provides existing data for companies’ CSR implementation. Finally, it can find identify the ones who are able to contribution to CSR activities. (Kok et al, 2001)

1.1.1CSR Stakeholder

The term “stakeholder” has a wild scope according to O’Riordan and Fairbass (2008). It has been defined as meaning “all groups and individuals who can affect or are affected by the achievements of an organization’s mission”. Stakeholders can be regarded as crucial element in companies’ external environment, and they act either formally or informally, individually or collectively, and can so on positively or negatively affect companies. (O’Riordan, 2008 and Fairbass, 2008)

Based on above consideration, therefore, it is crucial for companies to find out to whom they are responsible and how far that responsibility extends, and then, prioritize different stakeholder groups as different companies has different situation. After this companies should evaluate stakeholder expectations through dialogue and incorporate these expectations into its CSR plan ( Castka et al, 2004)

There exists subtle difference between investments in CSR activities and regular investments. CSR investment activities should focus on lying on pursuit of trade-off between profit maximization and stakeholder demands satisfaction ( Castka et al, 2004).

The following Figure shows companies should balance profit from CSR and its demand for CSR.

Castka et al, (2004)

1.1.1 CSR Initiatives

In terms of initiatives, there are mainly six areas, which are included in most of companies. The following Table shows six major initiatives are proposed together with their respective benefits and concerns

Table3 Six Dimensions of CSR Initiatives

Source: Kotler and Lee (2005)

1.1 Concept of Competitiveness

There is lack of clearly defined concept of competitiveness. It is because there is too much diverse perspectives and different levels of analysis when conducted competitiveness analysis. By analyzing the different definitions of competitiveness perspectives, it is possible to establish a common basis. Competitiveness is generally defined as

“Ability of a firm or a nation to offer products and services that meet the quality standards of the local and world markets at prices that are competitive and provide adequate returns on the resources employed or consumed in producing them[1]”.

The factors, which determines the capability of firm or nation to outweigh the ability of its competitors is the capacity to utilize its own resources as effective and efficient as possible in order to obtain a better performance. Based on this consideration, it is important to analyze different actors on the competition arena. The following will distinguish three basic actors:

A single firm or plant. At this level, the concept means that companies can produce goods and services more effectively and efficiently than its counterparts. In order to achieve this ideal performance, companies should relay on competitive factors, mainly focusing on efficient utilization of some inputs. A paper from OECD (2003) states

“Competitiveness is primarily a matter of being able to produce goods that are either cheaper or better than those produced by other firms”.

This statement is similar to what Jenkins (1998) states

“A firm is competitive if it can produce products or services of a superior quality or at lower costs than its domestics and international competitors. It is therefore synonymous of a firm’s long-run profit performance and its ability to compensate its employees and provide superior returns to its owners”.

A group of firms. At this level, the competitiveness means that different groups of companies utilize competitive factors, (For example, companies in similar industrial sectors, but in different nations), to gain a better performance on the local or international markets. In this case, to aggregate the performance of the single firm in the same operating in the same cluster can be regarded as the most effective way to measure the competitive performance. This level has closely connection with previous one, but not the same. Actually, a competitive industry can be regarded as the combination of a number of high competitive firms.

A territorial context. At this level, the concept implies that the competitive performance of nations or regions is combination of wide range of performances at the industry, firm and plant levels, and of their interactions with the institutional and social factors (cosmic report, 2009). So, this level cannot be simply regarded as the aggregation of the previous ones.

After the identification of the actors on different levels, we can go forward to the issue related to the dimension of competitiveness. Based on previous analysis, at least three dimensions of competitiveness can be defined:

International competitiveness:

At this level, competitiveness mainly refers to the success with which an entity (i.e. a country, a sector/industry, and a firm) competes against overseas counterparts (cosmic report, 2008). The OECD provided the most important and widely-used definition of international competitiveness:

“ the degree to which (a country) under free and fair market conditions, produce goods and services which meet the tests of international markets, while simultaneously maintaining and expanding the real incomes of its people over the longer term” (OECD)

National competitiveness:

At this level, it focuses on how to measure competitiveness in terms of growth of Gross Domestics Product or Gross National Product, GDP and import &export flows. National competitiveness, from perspective of most authors, rest on how efficient a country can allocate its resources and utilized at micro level.

Local competitiveness:

At this level, two elements relating to link between territorial localization and competitiveness seems to be key elements. The first is that economic, entrepreneurial and technological activities tend to agglomerate at certain places, leading to patterns of regional and local specialization. The second is that the competitive performance and development of a firm seem to be determined to a considerable extent by the conditions that prevail in its environment, and that the conditions in the immediate proximity (cosmic report, 2008)

After the analysis of the competitiveness actors and arenas, the next step will go deeply into the crucial variables affecting competitiveness together with the ways to measure them. There are many factors influencing competitiveness on different level according to previous analysis of actors and arenas. In addition, different definitions of competitiveness in terms of different levels also provide clue for measuring the concept of competitiveness. By evaluating existing approach, two major methods can be distinguished for measurement (cosmic report, 2008):

The first one focuses on analyzing the drivers of the competitiveness. For instance, resource productivity at firm level, the degree of internationalization at sector level).

The second one tries to investigate the external effects of the competitiveness success. For instance, market performance by market share; the turnover growth rate.

With the consideration of the ways to measure competitiveness, it is important to remember that competitiveness can be regarded at different levels of aggregation. Each one may be composed and influenced by different variables. (Cosmic report, 2008)

Based on above analysis, competitiveness can be measured at three different levels in terms of Macro level; Meso level; Micro level as described in Table

The research mainly focuses on the second level of competitiveness, which is on Meso level. The indicator in the Table3 for measuring competitiveness is a ground base for companies who are going to analyze its competitiveness capability. But each sector has its unique feature, therefore, it is wise to develop corresponding competitive indicator based on this ground base. Based on this consideration, the competitive indicators in textile & cloth industry were identified based on the general indicators, including high product quality; niche market/product differentiation strategies; efficient processes; research and development; flexibility and fast response to market changes; HR and organizational culture, which are regarded as the most important indicator for measuring competitiveness in Textile and clothing industry as described in Table1

1.1 Corporate Social Responsibility and Competitiveness

There is lack of literature on CSR and competitiveness, despite the number of this kind of study has increased exponentially in past few years. Most of previous studies tried to prove there is positive relationship between CSR and financial performance (M Tsoutsoura, 2004), although the results is mixed. Other researchers have came up with alternative approaches, such as creating a competitive advantage by generating stakeholder value (Freeman,1984), appraising how CSR can have influence on competitiveness such as reputation and image(Marc Vilanova, Josep Maria Lozano and Daniel Arenas, 2008), or conducting case studies related to CSR, which conclude that implementing CSR contributes to both short-term profits and long-term competitiveness (Juholin, 2004).

Weber (2008) proposed five main areas of benefits from CSR activities by extracting from existing research on CSR business benefits as described in Figure 3

Weber (2008), pp240

1.1.1 CSR impact on Image and Reputation

A company’s image plays very crucial role in pursuit of business success, which can be influenced by communication with stakeholder and reputation of a company. It is kind of unconscious response which people have when they talk about a company (Weber, 2008). The image of companies cannot be influenced by single factors but when these factors combine with each other, companies can suffer from this combination dramatically.

A reputation of a company is important and valuable assets. A positive one may bring many benefits to a company, however, a negative one may cause significantly harm to it. A company reputation is closely tied up with its stakeholders’ emotional beliefs about it. Image is not as the same as the reputation as it can change very quickly, but reputation needs long period to develop. Reputation needs to be consistent performance and deliver these performances to stakeholders. (Weber, 2008)

The following Figure shows factors influencing companies’ reputation.

Montgomery &Ramus, 2003

1.1.1 Cost Saving

Companies can significantly reduce costs by substituting materials during the implementation of CSR strategy, by improving communications with corresponding stakeholders, which can contribute to time saving or increasing chances to assess to capital. All these benefits related to cost saving can be derived from CSR related activities. (Weber, 2008)

1.1.2 CSR related Risk Management

CSR can also be regarded as a mean to either reduce or manage CSR related risks. Through CSR assistance, company can better manage CSR related risks, including avoiding customer boycotts or negative press. (Weber, 2008)

1.1.3 Increasing Revenue

CSR can contribute to revenue increase either directly by CSR-driven niche market or indirectly by image or reputation improvement. (Weber, 2008)

1.1.4 CSR impact on Human Resource

CSR plays important role in stimulating motivation. It is because people may be motivated by the facts that they are working for a company with better environmental record or better working conditions, or the facts that they may participate in CSR related activities, including volunteering program organized by company (Weber, 2008), as motivation mostly is value-driven rather than money-driven. Good payment is also important factors, which cannot be neglected as it is basic need of all employees. However, making employee feel proud of place where they are working for is also important.

“Employee retention is most strongly influenced by the behavior of the organization and its senior leaders as well as the learning and career development opportunities available for employee,” said Hamish Deery. CSR includes concern for employee s’ wellbeing as well as a concern for the environment. Through CSR activities, companies can create these benefits for employee. It has more possibility to maintain employees. Hamish Deery also mentioned that “ in this current tight labor market, companies that do not engage and empower through a range of initiatives such as providing training or personal and career development opportunities, are going to end up struggling to keep quality employee,”. So CSR activities plays crucial role in companies’ retention.

Furthermore, companies with good CSR practice can also have influence on attractiveness of companies. (Weber, 2008) This attractiveness also plays important role when it comes to recruitment process. Numbers of companies have noticed that it is important to attract talent employees as these employees are value asset of companies as well as important part in creating competitiveness advantage. Therefore, company should realize the important role CSR activities play in recruitment of quality employees.

2 Research Methodology and Planning

This section will elaborate on the research approach for the intended study on CSR and competitiveness. It will explain the methods that will be utilized in data collection to help in the achievement of the research objective. This section will also elaborate on how to analyze and manage the collected data under derived from planned activities within the time frame.

2.1 Research Design

The project duration is from May to September 2011. In order to achieve the research objective, close-end questionnaire will be submitted by email to companies with CSR standards; and in-depth interviews aims to obtain real experience about relationship between CSR and competitiveness from mangers in Zhejiang Province’s textile and clothing companies. The project therefore, will focus on combination with survey and interviews in order to explore the relationship between CSR and competitiveness.

The following Tableshows how research questions will be answered and what kinds of methods; information sources; preparation will be need for answering these questions.

1.1.1 Research Strategy Selection

The strategy of the study will focus on survey. Survey approach refers to a systematic method for gathering information from a sample of individuals for the purpose of describing the attributes of the larger population of which the individuals are members[1].The survey approach has been chosen because the researcher intends to analyze the relationship between CSR and competitiveness in a statistics way. The relationship between these two concepts are so abstractive that it will be difficult to shed light on the linkage without survey approach as it provides numbers and trends in diagram, which is more visual than words description. There are two kinds of survey in terms of how to structure survey.

The following table shows categories of survey and its key features.

Table 6 Aspect of Survey Method

Source: adapted from Dawson, Catherine, 2002

1.1.1 Data Collection

The research was initiated by the use of academic literature in responding to CSR, competitiveness and their relationship. Primary data were collected through interviews both face to face and phone correspondence. Primary data will be information collected directly from the interviewees in efforts to directly understand individual experiences. Meanwhile, through the questionnaire, data will also be emerged as primary data, which the researchers used to validate some of the information collected. In terms of second data, it includes literature, report and article collected as theoretical framework.

1.1.2 Sample Selection

Due to the enormous textile and clothing companies in China, it is time and cost consuming to include the entire population in the research, which refers to census study as the data is gathered on every member of the population. A small, but carefully chosen sample will be used to represent the population. The sample reflects the characteristics of the population from which it is drawn.

There are two ways to conduct sampling: probability and non-probability. Probability methods refer to that each member of the population has a known non-zero probability of be selected. In non-probability, members are selected from the population in some nonrandom manner.6

The following table shows the categories of sampling and key features.

Table7 Aspects of Sampling

Source: Kumar, Ranjit, 2005

The author of this research is using convenience sampling. This method is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth.6when choosing the sample of this research, the author have certain criteria to direct the selection. The criteria refer to “companies with best CSR performance” awarded by CSR organization in China[1], which guarantee the representative of sample.

1.1.1 Data Analysis

In order to demonstrate the relationship between CSR and competitivness, firstly, six competitive indictors were defined including high product quality; niche market/product differentiation strategies; efficient processes; research and development; flexibility and fast response to market changes; HR and organizational culture. These indicators have the most representative features in terms of competitiveness in textile industry. Then, a correlation between CSR and these six indictors can be established through analyzing data collected by questionnaires. By linking CSR and these six competitiveness indicators and analyzing them, the purpose of this research can be fulfilled.

Data analysis will be done after data collection since the raw data should be code and put into SPSS software. The data collected from the interviewers will be analyzed based on the literature study CSR and competitiveness. By using SPSS, it is very easy to testify whether there is a relationship between CSR and competitiveness indicator. Such data will also be further judged by information from interviews.

1.1.2 Validity and Reliability

Polit and Hungler (1993) refer to reliability as the degree of consistency with which an instrument measures the attribute it is designed to measure. The questionnaires will be sent to different companies, which will be answered and conducted by target groups, reveal consistency in response. Questionnaires will be designed in interviewee’s language in order to make it easy to understand, in order to reduce issues related to miscommunication. Following the interviews, the questionnaires will be translated into English in order to guarantee its consistency and readability. Avoiding data collector bias can also ensure reliability. The researcher’s being the only one to administer the questionnaires minimized data collector bias. The validity of an instrument is the degree to which an instrument measures what it is intended to measure (Polit & Hungler 1993). Content validity refers to the extent to which an instrument represents the factors under study. To achieve content validity, questionnaire includes a variety of questions on the knowledge of CSR, competitiveness indicators and CSR impacts on these indicators.

Questions will be based on information gathered during the literature review to ensure that they will be representative of what researchers should know about CSR, competitiveness indicators and CSR impacts on these indicators. Content validity will be further ensured by consistency in administering the questionnaires. The questions will be formulated in simple language for clarity. Clear instructions will be given to the target groups. There will be also limitations in the research in terms of duration, width and depth of data collection, opportunity to test results and recommendations.

1.2 Research Framework

The research framework is presented in Figure 9 below. It is in three sections: section (a) shows the literature review related to CSR and competitiveness which then leads to the development of key dimension of indicator of competitiveness. Section (b) illustrates how research process are going to go forward based on literature review and survey results analysis. Section(c) shows how the results obtained from analysis will then be used to demonstrate the relationship between CSR and competitiveness.

1.1 Planning and Timeline

With the consideration of above research framework, the different activities are presented as indicated in Table8

Table8 Activity Plan

3 Reference

Categories
Free Essays

‘Using the classroom to help develop people already practicing management is a fine idea, but pretending to create managers out of people who have never managed is a sham.’ Critically debate this proposition drawing on the literature on management education and, if possible, your own experience.

Introduction

Management development is a subject that has caught various debates and arguments with regard to its importance and implications. Its importance has grown over the years due to the rising business challenges due to the rapidly growing business environment. Companies seek leaders rather than plain managers who can drive profitability and growth into the business (Viacava and Pedrozo, 2010). The basic objective behind management development is to simply ‘develop’ managers who are to be those high potential future leaders. Various companies follow different strategies for incorporating management development into their human resource management systems in order to equip managers to face challenges of the business environment specific to the nature of the business (Nicholson, 1997; Coff, 2004). The more holistic the approach the more effective, as evident from the case studies of companies, such as Unilever. To debate on the topic of management development, three essential elements of a successful manager, creating which is the basic objective of management development, are to be explored (Cole, 1995). These are professional skills, competencies, and work experience, all of which combine to create an effective and successful manager who is highly sought after by the companies. To what extent the classroom learning can infuse these characteristics into a person to create an effective manager and to what extent they are unable to do so, are the two questions that the paper attempts to answer in the light of these three key elements.

Professional skills are the necessary skills that an individual needs to have in order to become a manager and practice management (Daft, 2007). These professional skills are embedded in the most management development courses for business school students or for in-practice managers (Davis, 1995). Beyond educational qualifications, the most essential skills that are required for the manager are the know-how of the various company operations, relating to the human resources, financial management, marketing management, operations management, the supply chain management, and customer relationship management (Gasper, 2006). Knowing these, the manager can take on a holistic approach in decision making for both tactical and strategic operations and activities (Cole, 1995). Analytical and problem solving are a must have as well as effective interpersonal skills as the manager needs to handle complex problems and get work done from subordinates and people around him (Gill and Lashine, 2003). Most importantly, coupled with the basic professional skills and interpersonal skills, for future leaders having leadership and entrepreneurial skills are essential as they make up their potential and capacity to become a driver of business profitability. Without these as a part of the course of the management development program, the outcomes will be quite ineffective (Cole, 1995; Heaton and Ackah, 2007).

Business schools transfer know-how via delivering lectures on different company operations and environments, bring in guests from the industry to shed light on the prevalent business challenges. Case studies allow the students to learn about how companies handle different situations (Kerin, 2008). Industry trips and visits to companies offer insights as to how different types of work and processes are carried out within the companies’ operations (Longenecker and Ariss, 2002). Students are given projects related with bringing in new ideas and developing strategies for real products and real businesses and are evaluated for their professional skills that are depicted in the final projects done (Coff, 2004). Schools often send out these projects to the companies the projects are based on or other professionals if the idea is related to a new business that does not exist presently (Nicholson, 1997).

The other important component of management development program is the development of managerial competencies (Pine, 1999). These comprise of a manager’s ability to handle complex situations, manager’s competitiveness and drive for development competitive strategies, the manager’s ability to generate innovations for the benefit for the company in terms of acquiring edge in the market and profitability, manager’s high performance for the organisation and the ability to create high performance levels within his chain of command, manager’s ability to adapt to the changing environment and be a change agent to allow implementation of the organisational change to take place effectively, manager’s ability to be a profitability driver into the business and manager’s team playing and team leadership skills (Gill and Lashine, 2003; Rodwell, 2005).

Business schools provide insights into the complexity of the practical work environment through computer-aided simulations or group work tasks. At presents management studies are offered projects and tasks to challenge their skills into delivering solutions to companies (Shen, 2005).

Business schools encourage the students to be competitive and compete against each other for exceptional ideas in projects and assignments and ideas (Viacava and Pedrozo, 2010). This produces a certain level of rivalry and thirst for out of the box thinking that is helpful and effective in infusing into them the competitive spirit and ability that is required by the organisations. However, this only reflects the competitiveness against colleagues in classrooms where less is at stake and not millions like in a practical work environment (Cole, 1995; Heaton and Ackah, 2007). With the stakes high, the competitiveness becomes a risky game for which clever strategies need to be developed. And in order to develop those competitive strategies years of experience is required and proper business intelligence in place which the business schools and class room environment does not entail in its courses (Vloeberghs, 1998; Rodwell, 2005).

The projects and assignments that the classroom lectures and business school courses comprise of create the capacity within the potential managers to think outside of the box and challenge their creativity into bringing new ideas relating to products and strategies. However, this creativity is limited subject to the restrained approaches to analyse the business environment. Much is unreal; however, real figures are taken from the business environment and because of these non-real and impractical situations, the depth of the idea and innovation remains shallow. There is a major line between a real business problem and a real solution (Kerin, 2008). Only a manager who is in that problem will be able to clearly see the requirements and complexities and come up with a solution (Viacava and Pedrozo, 2010). A consultancy from a student who has no experience or insight into the matter and only takes in opinions and literature to come up with solutions is ineffective practically speaking (Nicholson, 1997; Coff, 2004). Thus, the in-classroom training remains good for generating a potential within the individuals to get them prepped to face the business challenges by giving them a small taste of the complex business environment and its underlying ambiguous situation (Shen, 2005).

What class room learning does not entail however, is the capacity of performance especially under stressful conditions especially those that managers in the modern business environment face that only continue to grow bigger as the businesses and the micro and macro business environment expand. The student’s only concern during their courses is towards task accomplishment relating to projects and assignments and being regular so as to score high and graduate with good ranking (Vloeberghs, 1998; Viacava and Pedrozo, 2010). The key distinction between performance levels and capacities is of the objectives and orientations. In companies, keeping performance levels high is challenge as various external and internal forces hinder the effectiveness to prevail and there are a lot of high stakes that further produce complexities and challenges for the mangers to face such as losing out on the job if a massive loss occurs, fear of redundancy if performance levels are low, fear of hampering the career if a slight mistake occurs in the managerial effectiveness and if targets are not met by the subordinates under the manager (Gill and Lashine, 2003; Rodwell, 2005). The holistic and integrated nature of the performance is something only being in a company can be taught. However, one that has worked in an organisation before and faced these challenges, knows exactly what to produce further and uses the management development program to cover his weak areas only and matches his currently acquired skills to the challenges he needs to accomplish once he gets back to work (Nicholson, 1997; Coff, 2004).

The competency of adaptability and flexibility for a manger is highly essential as pointed out earlier. This competency is one of the hardest to develop and companies have had to face tremendous amount of challenges and problems owing to the management’s and thus, the organisation’s lack of flexibility and adaptability (Cole, 1995; Heaton and Ackah, 2007). The competency of flexibility and adaptability comes from the change acceptability capability of an individual which is very much related with a person’s attitude towards work. Be it a student or a professional, a person cannot be taught to be adaptable if his attitude towards his job does not permit him to be so. This is something both the organisation and the business school fail to infuse into a person. However, what an organisation and business school can do, however, is to prove to the student or manager how difficult it is to survive without having acceptance for change in a constantly changing environment at work (Crowther and Carter, 2002).

With organisations largely engaging in team work for tactical and strategic projects, a future leader or manger needs to have effective team playing and team leadership skills in order to get a competent edge over others in the organisation (Prince, 2002). Leadership as often acclaimed by researchers and scholars and practitioners is an inborn characteristics, however, people can be shaped with time and effort to adopt leadership skills. The most important elements, therein, are to have that urge, commitment and strive to become a leader and a team player (Vloeberghs, 1998). No one can be forced to take on the role of the leader (Gill and Lashine, 2003; Rodwell, 2005). This goes for business school learning and class room learning as well as organisational management development for in-practice managers (Crowther and Carter, 2002). The distinction between the effectiveness of the class room and the organisational management development program in creating leadership characteristics within the managers is that in-practice managers, with prior experience of being around leaders or have been in the role of leadership, where they suffered lack of skills to get the work does from the team members, know exactly what to improve or what to seek and have a much larger amount of motivation to pursue the training (Cole, 1995; Heaton and Ackah, 2007). The non-practicing and non-managerial students that have no prior experience of management know little as to what to expect from a leadership role and thus, take the learning as a general course and have to later look back onto these details, which they often forget once they start work, upon facing difficulties in managing problems. They then learn from their mistakes rendering the classroom learning ineffective (Vloeberghs, 1998; Viacava and Pedrozo, 2010).

This brings to the third most important element of the management development program: the work experience. The possession of work experience allows the individual to actually become a manager. A manager is only so upon practice as book reading does not make a manager only practice does (Prince, 2002).

Because of the possession of an ample amount of work experience of the in-practice managers, the management development initiative taken for them renders quite effective outcomes as they to enhance their sills and qualifications in a specialized area of interest and capability as identified through prior performance and development appraisals, and to improve their weaknesses and remove their deficiencies (Shen, 2005).The result of this effort is the high performance output that the developed managers produce for the organisations (Gill and Lashine, 2003; Rodwell, 2005). The potential managers that graduate from schools with no prior work experience are not equitable to the role that the experienced managers with development course have, though both may have the same educational background (Nicholson, 1997; Coff, 2004). Business schools, thus, only create potential managers, that may need to undergo further management training when need be and if they are unable to handle complex business problems (Pine, 1999; Prince, 2002).

Companies upon external recruitment prefer candidates for the role of managers in the organisation who possess strong managerial educational backgrounds but with educational qualifications, they seek work experience and specific skills that match the challenging nature of the job in context. This notion then questions the ability of the business schools to ‘develop’ or rather create managers as often the successful and progressive managers in the practical work environment are those that are managers in practice and obtain grooming and development on-the-job or as part of the company training programs (Nicholson, 1997; Coff, 2004). Companies also send their high potential managers to business schools for specialized managerial courses to further their competencies (Vloeberghs, 1998). These managers find more career opportunities and growth as they enhance their qualifications as leaders and challenge further the ability of the un-experienced management graduates to pursue their career in management in contrast and win the companies’ preferences for employment.

Self Learning Audit

The Skills and Insights Developed

The course of management development has a lot to offer to the management students and delivers the key insights of the need to continuously develop one’s skills and capabilities as a manager in order to succeed in a challenging business environment. The course was surely in-depth and offered various learning elements to be infused into a student’s mind to be prepped for the career development as a manager.

Specifically, the following skills and insights were developed:

There are three key components of a management development program that produce effective outcomes: professional skills of a manager, competencies, and work experience. All of these need to essentially incorporate into the management development programs in order for effective managers to be created;
The classroom environment surely does not suffice fully the requirements of a successful management career and the creation of effective and high performance business leaders, as the importance of in-practice management and work experience cannot be ignored;
Business schools have begun to incorporate professional training and practice management courses that enable the students to gain work experience during their course of studies, which is proving to be effective as it gives the students an edge in the job market, and fulfils the requirement that the companies seek upon recruitment relating to prior work experience;
Management development, owing to its importance for growing companies and progressing managers, and the creation of future business leaders, it has and will continue to receive immense importance and exposure. The subject is growing in its scope and various new modules and components are being added into the management development courses and training programs coupled with computer-aided tools and techniques to produce interactive and simulation based learning of the potential managers.

Areas of Improvement

Having a hindsight of the project, I would have used more data collection sources in my exploratory research study such as interviews of professional human resource development managers, so as to gain a more first hand and detailed insight into the matter.

References

Coff, L.V. (2004) “A new paradigm for business education- The role of the business educator and

business school”, Management Decision, 42(3/4): 499-507

Cole, K. (1995) “Management Development to the Millennium”, Management Development Review, 8(3):

20-23.

Crowther, D., and Carter, C. (2002) “Legitimating Irrelevance: Management Education in Higher Education Institutions”, The International Journal of Education Management, 16 (6): 268-278.

Daft, R. (2007) Management. South Western College Publication.

Davis, R. (1995) “New Principles for Management Development”, Management Development Review,8(6): 5-8.

Gasper, J. (2006) Understanding Business. South Western College Publication.

Gill, A., and Lashine, S. (2003) “Business Education: A Strategic Market-Oriented Focus”, The

International Journal of Education Management, 17 (5): 188-194.

Heaton, N., and Ackah, C. (2007) “Changing HR careers: implications for management education”, Journal of Management Development, 26(10): 951-961

Kerin, R. (2008) Marketing. McGraw-Hill/Irwin.

Longenecker, C.O., and Ariss, S.S. (2002) “Creating Competitive Advantage through Effective

Management Education”, Journal of Management Development, 21 (9): 640-654.

Nicholson, A. (1997) “Bringing management reality into the classroom – the development of interactive learning”, Journal of Management Development, 16 (6):438-451.

Pine, J. (1999) The Experience Economy: Work is Theatre and Every Business a Stage. Harvard Business School.

Prince, C. (2002) “Developments in the Market for Client Based Management Education”, Journal of European Industrial Training, 26 (7): 353-359

Rodwell, J.J. (2005) “The assessment of formal management development – A method, a baseline and the need to incorporate learning styles”, Journal of Management Development, 24 (3): 239-252

Shen, Ji. (2005) “International training and management development: theory and reality”, Journal of Management Development, 24 (7): 656-666

Viacava, K.R., and Pedrozo, E.A. (2010) “Higher education in management: reinventing the paradigm to gain the capacity to handle today’s complexity”, On the Horizon, 18 (1): 45-52.

Vloeberghs, D. (1998) “Management development in a context of drastic changes”, Journal of Management Development, 17 (9): 644-661.

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Free Essays

Human resource management

Introduction:

Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization’s goals and objectives.

As competitors strive to win the war for talent, effective human resource management is necessary to gain true competitive advantage in the marketplace. Three challenges faced by nations and companies in 19th century are shown in Curtis (2006) “The Century of the Self” Part 1 are sustainability, technology, and globalization.

Curtis (2006)

Sustainability is the potential for long-term maintenance of wellbeing, which has environmental, economic, and social dimensions.

Globalization requires attention to “more than conducting business across national borders but also entails expanding com­petition for almost every type of organization presenting management with the challenge to operate in diverse cultural settings” (Edwards, 2006)

Globalization represents the structural making of the world characterized by the free flow of tech­nology and human resources across national boundaries as well as the spread of Information Tech­nology and mass media presenting an ever-changing and competitive business environment.

Globalization makes national culture an increasingly strategic issue that has to be faced and properly managed. The problem is the balancing of the global trends in human resource management with the influence of national culture because many aspects of HRM are affected by differences in national culture. Custis (2006) analyze the problem of balancing seemingly opposing forces (globalization and the influence of national culture) and to identify trends in HRM during 20th century across coun­tries: USA, Germany and United Kingdom.

Curtis (2006)

Technology not only changes the administration of human resources (HR), but also changes organizations and work. HR professionals must be able to adopt technologies that allow the reengineering of the HR function, be prepared to support organizational and work-design changes enabled by technology, and be able to support the proper managerial climate for innovative and knowledge-based organizations.

By far the most significant drivers of strategic change in the world today, globalization and technology innovation, are accelerating at a pace that will make them even more important in the decade ahead. Globalization is proceeding differently in different industries , driven primarily by: increasingly similar demands of end users for global products: changing needs and capabilities of global customers , underlying economics of scale and scope in research , product development , and manufacturing . Technology enables firms within an industry to capture economics of scale and scope by going global, global firms rely on technological innovation to enhance their capabilities. Technology is thus both driven by, and key driver of globalization.

Asian and Western Management Styles

Management style is the set of philosophies or principles by which the management exercise control over the workforce and bind diverse operations and functions together in order to achieve organizational goals. Earlier research found that firms which tend to employ the participative (or Western) management style favor allowing workers to enhance their professional skills. In contrast, it has been suggested that centralized decision-making, the traditional Asian management style, which is characterized by paternalistic leadership, collectivist orientation and greater power distance between managers and workers, could impede individual creativity (Thompson, 1965) and hence hold back the development of professional skills.

Western Management Education:

It is now widely accepted that HRM, as a concept, was initially popularized in the USA . In fact , the teaching of management and business as education subjects was first pioneered in the united states. Wharton Business School, which was created in 1881 .In contrast, Cranfield School of management and London Business School, which were the first two schools in Europe , were created in 1965. (Locke, 1989)

The Americans were first into the field not only of management, but also of human resource management and arguably have developed hegemony in what the subject involves and what is good practice (Brewster, 2000). HRM is viewed as a logical and rational system. From this viewpoint of seeking, Fomburn et al.(1984) state that the activity of managing HR consists in a five-step cycle: selection , performance, appraisal , rewards and development. Indeed, all firms have to manage this (or a similar) process regardless of where they are in the world. However, it is helpful to consider the management of HR not as a strict system of ‘rational’ processes but as the process of managing people. People cannot be ‘managed’ in a vaccum, they are managed within a context.(e.g. cultural, social, educational, religious, geographical, legal, historical). The process of HRM is therefore not neutral, it is surrounded by cultural, social and other norms characteristic of human behavior. Although the American development of HRM first appeared akin to a scientific process , a number of writers have since put it into context and characterized a so-called US- Model of HRM or in some formulations, a ‘uni-versalistic’ model, since its proponents argue that it can be applied anywhere in the world. It is important to spend some time reflecting on what underpins the notion of American HRM as it follows other complementary positions to be refined. (Harzing & Ruysseveldt, 2004)

The findings summarized here provide an illustration of nationally bounded collective mental maps about organizations that seem to resist convergence effects from increased professionalization of management and intensity of international business. Neighboring western nations seem to be forming fairly differentiated images of organizations and their management. This attempt to use a comparative phenomenological approach to the study of organization seems to elicit findings that cast serious doubt on the universality of management and organizational knowledge and praxis

It may be very well be that the management process in these western countries is as much culture blund as their cooking , and that international management has to avoid the trap of international cuisine. National cultures may still offer some genuine recipes.

Eastern Management Education:

Human resources management in East Asian

With the reforms of the employment system, a new system, a new terminology of human resource management came to China in the middle of the 1980s.Warner(1995, 1997). Initially, HRM as an academic concept was introduced by joint teaching arrangements between Chinese and foreign universities as well as in management practice in foreign-owned enterprises, mainly from japan, the US and Europe (warner ,1995). The translation of HRM into Chinese is renliziyuan guanli (with the same Chinese characters as in Japanese) which means ‘labour force resources management’. But in fact , some people now use it misleading as a synonym for ‘Personnel Management’ (renshi guanli) and indeed treat it as such (Warner,1997). This form of older personnel management practice is still very common in SOEs and a fair degree of conservatism continues to pervade the administration of personnel in such enterprises. Certainly, it is still very far from the initial concept of HRM as understood in the international community (Poole, 1997).

In parallel, attempts were made to import ‘enterprise culture’, a ‘code-word’ for adopting and adapting the Japanese model (Chan, 1995). This is normally found in firms entering JV arrangements with Japanese multinational companies or where the Japanese have set up wholly owned firms on site.

East Asia has been surge economic growth since 1960s. Its cultural background has undoubtedly played a significant role in this process. There is a core value- system based on the combined characteristics of Confucianism, Daoism and war strategies which still has a strong influence on Asian HRM, although clearly exceptions also apply.

Indian Human resource Management:

Indian Management practioners and academics have developed a distinctive approach to Human Resource Development. HRD approaches are increasingly playing a role in organizational responces to issues arising from liberalization. Accustomed to operating in protected markets, organization are having to learn to manage combining the virtues of conflicting market models , rather than relying exclusively on a single set of pre-conditioned theoretically validated policies. HRD therefore addresses the need to arrest deteriorating values, building up organizational and cultural strengths, broadening the philosophy of tolerance and sacrifice and displaying deep concern for people (Rohmetra, 1998). HRD as a ‘humanistic ’ concept and a subsuming norm that guides management approaches to its employees has come to assume a critical role in Indian management philosophy , HRD involves a paradigm shift from old approach of control to the new approach of involvement and self-development (silvera,1988) and would be more closely aligned with the ‘soft’ approach to HRM.

HRD is similar to the concept about the rights and duties of human beings about which democratic constitutions the world over consider inalienable and inseparable from human nature, and has similarities to the United Nation Development Programme’s concept of a nations human development. HRD is therefore a humanistic concept that places a premium on the dignity and respect of people and is based on a belief in the limitless potential of human beings. It emphasizes that people should not be treated as mere cogs in the wheel of production, but with respect as human beings.

As humanistic concept HRD proposes that human beings should be valued as human beings , independent of their contribution to corporate productivity or profit. The various underlying attitudes symbolizing respect for people’s dignity, trust in their basic integrity and belief in their potential, should lead to the creation of an environment in companies in which individual should find fulfillment in work and seek newer horizons for themselves and the enterprise (Rohmetra, 1998).

HRD practices in Indian companies attempt to blend western and eastern ideas and systems of people management. This concept of HRD attempts to be more comprehensive and meaningfull than utilitarian concepts evolved in Anglophone countries. It has come to denote a planned way of developing and multiplying competencies, and the creation of an organization climate that promotes the utilization and development of new competencies. Culture building is seen as a part of its agenda.

(Jackson, 2002)

Future Assumptions Observed to be a part of human resource management:

Legge (1999) states that the new assumptions observed to be a part of human resource management are:

Proactive, system – wide interventions with, emphasis on fit, linking HRM with strategic planning and cultural change.
People are social capital capable of development
Coincidence of interest between stakeholders can be developed
Seeks power equalization for trust and collaboration
Open channels of communication to build trust , commitment
Goal orientation
Participation and informed choice

Management Education:

Management education in schools of business and public administration has received less attention than other aspects of the study of management.

There is a contradiction on Management Education which is not being adequately confronted. As attempts is made to change organizations or some part of them to more democratic structures, so the ability of education and training to facilitate that change seems to be losing ground. There is no single reason for this, yet it seems to be chiefly because our collective skill in the design of education or training experiences has outstripped our understanding of some of the fundamental process involved. In particular, it seems to have overlooked the function which education servers in preparing people for membership work organizations.

Research in management education has not been a source of inspiration, Although problems abound , certain basic issues are generic. One issue is the criterion problem in management education research. Criteria that have been utilized have often been chosen for convenience rather than for therotical or practical relevance.

Freedman and cooper (1982)

Challenges for the management education:

One of the challenges for the management educator is to make a judicious choice amongst the teaching methods is to ensure that individually or in combination they facilitate translation and / or transfer , and that this facilitation is not achieved to the general detriment of either of the learner reactions identified. Meeting this challenge, teaching methods require a certain robustness , contributing to the solution of two separate if related problems , whilst achieving their goals and maintaining their appeal to an audience which is most likely to be heterogeneous in respect of the learners reactions it displays.

To meet the challenge the management educator must be able to justify the learner reactions of participants prior to observing their consequences. Reflecting on past courses, conferences or other learning events, we can often identify participants whose behavior, in one or more sessions conforms to the broad descriptions, almost stereotypes, that have been outlined. Fortunately, a number of sources other than observation can also be used to estimate the extent and nature of an audience’s heterogeneity. Evidence for the range of orientations can be gleaned from pre-event questionnaires. Such questionnaires, by identifying the balance of participants are a useful aid when determining the particular mix of teaching methods which can be effectively used.

The need for the continued growth of knowledge and practice in the field of HRM and management education is a viewpoint and collaboration between management scholars, academicians and practitioners and also between the disciplines of business, psychology, engineering and economics. Specifically, ones need to develop and incorporate into ones thinking an appreciation for the practitioners and academicians share the same concern for accurate description of present work conditions, yet the data itself needs to be provided by the practitioners.

Beck and cox (2003)

Conclusion:

One means of ensuring that HR practices are consistent with labor-market requirements be to staff the HR function with host country nationals. This paper shows differences in HR practices in different nations.

European history has been charged with conflict and alliances for two thousand years. Yet, from the beginning, there have been attempts to unify Europe. It may be that, in future as flexibility, adaptability and agility increasingly become sources of competitive advantage , the value of coherence and unity enjoyed by countries such as the USA and Japan is lessened and the value of diversity increases. If so, then regions like Europe, with its capacity to draw on substantial diversity , may be in a better position to respond to the challenges of the modern era.

Social entrepreneurship has significant potential to make positive and sustainable changes for the betterment of society’s long-lasting and problematic issues, such as pervasive poverty and widespread hunger.

References:

Brewster, C. (2000), ‘European Human Management’, in M. Warner (ed.), International Encyclopedia of business and management: Management in Europe . London: Thomson. Pp. 81-93.

Beck , J and Cox, C. (2003), Management education, Department of management Sciences , The university of Manchester Institute os science and technology chapter 1.

Curtis, A. (2006) The Century of Self. [Online] available from [accessed on 13 July 2011]

Edwards T., Rees Ch., (2006). IHRM: Gloaba­lization, National Systems and Multinational Com­panies. Prentice Hall 310, pp.

Freedman, R.D and Cooper C. (1982), Management Education Issues in Theory , research and practice, university of Manchester UK chapter 1.

Fomburn, C., Tichy , N. and Devanna, M. (1984) Strategic Human Resource Management , New York : wiley.

Jackson, T. (2002) ,International HRM: A cross-cultural Approach, London, 2002, Chapter 10, pp.

Legge,K. (1999) Human resource management Critical perspectives, vol: 1, pp209 – 260.

Locke, R. (1989). Management and higher Education since 1940, The Influence of America and Japan on West Germany , Great Britain and France. Cambridge: Cambridge University Press.

Rohmetra, J. (1998) Human resource development: Experiences, Intervention, Strategies, New Delhi.

Silvera, D.N. (1998) ,Human resource development New India publications.

Thompson, A. (1965), Bureaucracy and Innovation, Administrative Science Quarterly, chap: 10, pp1-20.

Warner, M. (1995) The Management of Human Resourses in Chinese Industry, London: Macmillan.

Warner, M. (1997) The Management- Labour Relations in the new chinese Economy, Human Resource Management Journal, 37(4), pp. 30-34.

Categories
Free Essays

The Role of Human Resources Management in an Organisation

Introduction-

Human resource is considered as the backbone of any organisation. The concept of the Human resource management (HRM) had been debated in the literature. Initially the concept of HRM developed from U.S.A in the 1960s. It plays vital role in creating organisation. In the recent scenario human resources has added more values in developing country. The Human resource management is very fast growing concept. It has marvellous relevance in the productivity industry. Management of the people and staff practices and policies enable to carry organisation successfully. Human resource management is all about allowing staff to utilise their qualities in order to fulfil their contribution and role of the organisation motive and aim. Good human resource management is very much crucial if organisation want to entice and hold good staff. It also means that an organisation reduces risk to its staff and reputation. Human resources management can also reduce organisation cost. For example, good recruitment processes and policies mean that organisation can recruit more staff that can carry their jobs very efficiently. On the counter part, good system for performance management mean that organisation has to ensure that they are achieving best from their staff. Human resource management included all management practices and decisions which may stimulus the employees. The Human Resources Management (HRM) included all activities like training; recruiting, satisfying employee’s needs and also confirming personnel and management practise. HRM also comprise managing an approach to provide compensation and benefits of employee.

Evolution of the Human Resource function

DIFFERENCES BETWEEN HRM AND PERSONNEL MANAGEMENT-

Although both human resource management (HRM) and personnel management focus on people management, if we examine critically, there are many differences between them. Some are listed

HRM, on the contrary, encourages organizations to look beyond pay for functional duties. Here, the pay is designed to encourage continuous job performance and improvement which is linked to value-added incentives such as gain sharing schemes, group profit sharing and individual incentive plans.

The job design is no more functional based but teamwork and cyclical based. HRM creates a new approach towards job design such as job rotation which is inter and intra-departmental based and job enlargement which encourages one potential and capable individual to take on more tasks to add value to his/her job and in return enjoy added incentives and benefits.

Organisation Structure and HRM strategy-

Air-India is always well know importance of human resources and it HR polices are mainly focusing on best service in the airline industry. With the concentration on the same, Air-India also goes for campus recruitment from the colleges or universities to recruit young students for the company. The following the key factors for HR committee:

Employee’s growth strategy
Confinement and attraction strategies for worker
To motivate learning within the company

Human resource management department responsibilities can be broadly classified by individual, organizational, and career areas. Individual management entails helping employees identify their strengths and weaknesses; correct their shortcomings; and make their best contribution to the enterprise. These duties are carried out through a variety of activities such as performance reviews, training, and testing. Organizational development, meanwhile, focuses on fostering a successful system that maximizes human (and other) resources as part of larger business strategies. This important duty also includes the creation and maintenance of a change program, which allows the organization to respond to evolving outside and internal influences. The third responsibility, career development, entails matching individuals with the most suitable jobs and career paths within the organization. Human resource management functions are ideally positioned near the theoretic centre of the organization, with access to all areas of the business. Since the HRM department or manager is charged with managing the productivity and development of workers at all levels, human resource personnel should have access to and the support of key decision makers. In addition, the HRM department should be situated in such a way that it is able to effectively communicate with all areas of the company. HRM structures vary widely from business to business, shaped by the type, size, and governing philosophies of the organization that they serve. But most organizations organize HRM functions around the clusters of people to be helped they conduct recruiting, administrative, and other duties in a central location. Different employee development groups for each department are necessary to train and develop employees in specialized areas, such as sales, engineering, marketing, or executive education. In contrast, some HRM departments are completely independent and are organized purely by function. The same training department, for example, serves all divisions of the organization.

In recent years, however, observers have cited a decided trend toward fundamental reassessments of human resources structures and positions. “A cascade of changing business conditions, changing organizational structures, and changing leadership has been forcing human resource departments to alter their perspectives on their role and function almost over-night,” wrote John Johnston in Business Quarterly. “Previously, companies structured themselves on a centralized and compartmentalized basis?head office, marketing, manufacturing, shipping, etc. They now seek to decentralize and to integrate their operations, developing cross-functional teams. Today, senior management expects HR to move beyond its traditional, compartmentalized ‘bunker’ approach to a more integrated, decentralized support function.” Given this change in expectations, Johnston noted that “an increasingly common trend in human resources is to decentralize the HR function and make it accountable to specific line management. This increases the likelihood that HR is viewed and included as an integral part of the business process, similar to its marketing, finance, and operations counterparts. However, HR will retain a centralized functional relationship in areas where specialized expertise is truly required,” such as compensation and recruitment responsibilities.

Key HRM activities of Air-India

Organization
The employment relationship
Resourcing Utilisation

The changing role of the Human resources Management-

Human Resources Management Models-

By using the core concept of the HRM there are mainly five basic models which are used in practise. The assessment is lead in the context of the recently liberalized economic environment. The five models of HRM namely ‘Matching model, Harvard model, Contextual, 5-P model and European model identifies the main research question developing from these that can be used to highlight the HRM practices.

Harvard Framework Model of the Human resources Management-

The model shows and characterizes as a real actor which is capable of making some degree of the same contribution which is related to the corporate objective within the organizational constraints. The framework of Harvard model mainly has five components which are mainly

The situational factors which influence the management of HR strategy. This model involves workforce characteristics management philosophy factors.
According to Beer et al (1958), In the Human resources management policies, Stakeholders interests are the very important. To satisfy the stakeholder HRM should be responsible and if they failed to do so then they have to face some problems. Air-India had faced some problems in their past. HRM of Air-India had developed a new policy with the government and also they fulfilled the expectation of stakeholders.
Policies of HRM select and totally focus upon the management actions and decision in the HR management which can be appreciated on the bases of result from an interaction between choices and constraints. Air-India sees to that polices that are being implemented should be approachable to the employee. Regular feedback should be made in the company through the different mediums.
Human resource outcomes are highly employee commitment to organizational goals. Individual performance is the leading to the cost effectiveness of product and the services. As mentioned above paragraph the HRM is in this Air-India organization is participating in six major areas. By Optimizing the success of the Air-India’s Service through effective management and the development of the most valuable employees is responsibility of HRM.
The Harvard Framework model helps in maintaining good relations of HRM with the other department of management which includes decision making also. The strength of this model is that the classification of input and outcome of societal level and organizational level creates the basic for an analysis of comparative HRM. The weakness of this model is the absences of coherent theoretical basics for measuring the relationship between HRM performance and outcomes.

Guest Model- David guest (1989) has advanced a more rigid conjectural framework, which reflects set of incorporated HRM practices cab achieve superior individual and organizational performance. The central theory of guest model is that if an integrated set of HRM practices is applied in rational fashion, with a view to achieve the normative goals of high commitment, high quality and task flexibility, then a superior individual performance will result. This model has six of its components: The Guest model (1989) is prescriptive in the sense that it is based on the assumption that HRM it is distinctively different from traditional personnel management (rooted in strategic management, etc.).It is idealistic, implicitly embodying the belief that fundamental elements of the HRM approach such as commitment have a direct relationship with valued business consequences. However, Guest (1989) has acknowledged that the concept of commitment is ‘messy’ and that the relationship between commitment and high performance is difficult to establish. It also employs a ‘flow’ approach, seeing strategy underpinning practice, leading to a variety of desired outcomes. Like its American predecessors, this UK model is unitary (tying employee behaviour and commitment into the goals of strategic management) and lukewarm on the value of trade unions. The employee relationship is viewed as one between the individual and the organization. However it is being argued that the guest model does not identify the key difference between HRM and personnel management namely a shift from a hands on, fire fighting approach to a planning function of a company as being a part of the overall corporate strategy. Air-India continuously monitors its employees and sees that they are satisfied with the policies and their feedback is taken into the account for every policy that changes it makes. Other critics had observed that the guest model may simply be an ideal type towards which western organizations can move.

Human resource management at organisational level- Human resource management consists of many aspects. Few organisations may feel overcome and uncertain about where to start making enhancements. This case is mainly for the organisation that do not have department which is precisely responsible for human resources management. There are many aids in human recourses management of having ownership with staff members. For example, the organisation can be kept informed on legal matters. A synchronized method can be taken with favour with practice and policy. This may help to ensure that the organisation have reasonable and reliable behaviour towards its staff. They have access to assistance on the issues which are related to the staff. Payments are fair and reliable. Good practice and strategy can be put in place. This enables best people to be recruited.

Functions of HRM at the Time of Austerity:

Human resource planning (HRP) is where the HRM professionals or management predict the need for new work forced based on the vacancy that exits or which is predicted for the future Recruitment & Selection-

Recruitment and selection play very vital role process and it is important to select the best staff for the organisation. This guide sets out best practices to assist in making process effective. The success of HRM is based on recruitment & selection of employees of an organisation. The quality of the service is mainly influenced by recruitment and service of the organisation. At the time austerity, Air-India started internal recruitment & which was very effective tool in the recession. As Air-India needs to cut jobs and best aptitudes in the company can be offered challenges and new jobs opportunities. The organisation has set the job openings and the employees can compete for the defined job position. But the internal recruitment is not safe for all the employees it is only safe for those who want to get a new job challenge in the company. At the time of recession internal recruitment process in Air-India was very congested. The Human resources management have managed the full process open and transparent. All the Applications were managed and the employees got the feedback from the job interview. After this Air- India designed whole recruitment process as temporary and healthy and all applications were recorded carefully as result of that there was no mess and no complain from employees in the whole process. The internal recruitment process helps to the company to reinforce it talents and capabilities at the time of austerity as the employees move to the better job position.

Performance structure ropes an integrated human resource strategy which helps the accomplishment of business and organizational goals. In every organisation performance appraisals is plays vital role for their future organizational growth organisation must ensure to implements a comprehensible feedback process to their employees. At Air-India the Human Recourses team appraise the performance linked to the Air-India’s organisation goal by providing goal and also by there working strategy for their future growth. Performance management system comprises

Performance appraisal is an important way to ensure that the organization implements a comprehensible feedback process for its employees in order to promote personal and organizational future development. Most high-performing organizations have procedures in place to offer structured response of all employees on a regular basis as a means of capturing the effectiveness of individual performance. Revision of employee performance will help the organization to get involved in this crucial process of managing employees more fairly and effectively.

Training & Development- Most of the organisation focuses on the training to their employees with the help the proper resources to achieve company’s goal. Air-India designated right person to motive for its training programme and start its development and training services. Air-India concentrated on biennial training strategy to include funding required for the plan and an strategy for fulfilling the goal, objective and the procedures.

Recommendation-

For any organization no matter how big or small there is always room for improvement in HR. following are my suggestions Performance feedback- managers should meet individually with staff once is 3 months and provide a feedback on the particular staff members performance and suggest improvements that could be, made before the next meeting Clearly defined expectation from the staff managers to make it clear to employees on what is expected from them on a regular basis. Regular absenteeism managers should do a counselling with staff and find out if the employee has any grievances or job dissatisfaction which is causing the absenteeism. Defining career development goals motivating staff by showing them what they are working for and that they have a clear achievable career path with Air-India.

Performance appraisal as an on-going thing rather than an annual thing. Setting S.M.A.R.T objectives for staff this should be set in direct alignment to Air-India corporate objectives. Authorised leave at the beginning on the year to provide staff leave forms that must be handed back within a given deadline so that holidays won’t affect the business and adequate staff to cover the shift.

Constantly review HR procedures and policy to make sure it is up-to-date with the law and its suitability for HR. Training & development managers to identify staff training and development needs and to work with HR department to ensure these needs are met

Conclusion

Human resources are a key element in the success or failure of monitoring programmes to meet their objectives. Without an adequate strategy to develop the human resources available and attract high calibre staff, monitoring programmes rapidly stagnate. Whilst poor quality of staff in water quality monitoring programme may reflect a wider difficulty in attracting staff to the sector, every effort should be made to invest in staff at all levels. Human resources development should encompass a much wider remit than training and should address issues such as career structures and professional development. It should also provide all levels of staff with the support and framework within which to function effectively and efficiently. Human resource management play a vital role in achieving organizational goals through HR planning and managing performance. In this assignment I have discuss different rolls of HRM in selected organization (Air-India).HRM not only responsible for HR planning and decision making. Through recruitment, training and development HRM selects best employees for organization which play its role to achieve strategic goals. Through HRM performance appraisal which makes an organization more efficient. It does not only focus on the overall strategic goal of an organisation, but also manage its human capital also helps in keep track on globalization and the effects or benefits it could have and at the same time have to monitor and updating the organizations HR policies and procedures. The HR department must not only attract, recruit, selecting and train and develop the workforce but also helps in monitoring through different methods.

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Leadership and Management Essay

INTROUCTION

In this assignment I am going to define leadership and management, and then I will discuss some of the leadership theories i.e Contingency Theory, Path-goal Theory, Great man theory, Management theories, Transformational theory /leader. After that I did an organisational setting in which I discussing the leadership style of Steve jobs in Apple. Then I am going to discuss my strengths and weaknesses on the basis of my peer feedback. At last I write conclusion and recommendation.

Leadership

Leadership have different definitions given by different authors and practitioners, but generally it is relationship in which the behaviour or actions of people are influenced by one person.

‘’Leadership is the process of influencing a group within an organisation towards achieving an aim or goal’’ (Johnson, Scholes & Whittington, 20011:471).

According to Yukl leadership is:-

‘’The process of influencing others to understand and agree about what needs to be done and how to do it
And the process of facilitating individual and collective efforts to accomplish shared objectives.’’ (Yukl, 2010:26)

Individuals and organisations performance is influenced by the leadership because it is a two-way process. To enable their followers to function effectively leader motivate their followers and design organisational contexts. If the group is influenced or motivated by the leader and give their full effort to reach the desired goal then the performance of the company automatically improved.

MANAGEMENT

As Mullins said Management is ‘’Getting work done through the efforts of other people.’’ (Mullins, 2010:434)

Manager is the person who performs the function of management by using the available resources efficiently and effectively to accomplish desired goals and objectives.

Difference between Leadership and Management

Leadership vs. Management

Managers do things right; leaders do the right things.
Relationship of Managing is an authority; leading relationship is influensive.
Stability is created by management; change comes because of leading.

LEADERSHIP THEORIES

Contingency Theory of leadership is related to the business environment that determines which leadership style is best for the different situation. According to this theory there is no single style of leadership is appropriate for all situations.

Path-goal Theoryis the third contingency model of leadership focuses on the leader to motivate subordinate. It suggests that the leader should remove hurdles, clarify the paths and increasing the reward for the followers to reach the goals by using any of the four leadership behaviour i.e. Directive leadership, Supportive leadership, Participative leadership and Achievement-oriented leadership.

(House and Dessler, 2010:387-388)

Great man theory suggests that leadership capability is inherent and the great leaders are born not made. According to this theory you are either a natural born leader or you are not.

Management theories are also known as transactional theories. This leadership theory is based on system of reward and punishment.

Assumptions of Management theories

If the people get command from one superior or the chain of command is definite, then they perform their best.
Management use reward and punishment to motivate workers.
Followers must obey the instructions and commands of the leader.

Transformational theory /leader efficiently and effectively motivate its team by using chain of command to get the job done. Transformational leader imagines the big picture of the organisation and come with a new idea that moves an organisation to reach that level.

Broad framework of leadership styleis the managerial leadership towards subordinate staff and the focus of power within the three headings-

Autocratic style- In this style management has the focus of power to take any decision.
Democratic style- In this style the focus of power is more in a group. The leadership should share its function with group.
Laissez-faire (genuine) style- In this style the group members have freedom to do whatever they want because manager knows that members of group are doing right thing.

(Mullins, L.J. 2010:381)

ORGANISATIONAL SETTING

I read a case study of an Apple founded by Steve Jobs in1976. After reading the case study I found that Steve jobs is a transformational leader because he always comes with a new idea and effectively motivates his subordinates to reach his plan or goal. He believes in change that’s why he always found an opportunity in consumers taste and want.

Apple is founded in 1976 and comes with Apple I a personal computer kit.
He introduces Apple II in 1977 with colour graphics and floppy disk.
Then apple launched Macintosh in 1984 it is the key step in the development of today’s pc.
In 1996 apple bought NeXT.
In 2001 he launched iPod music player for music lovers. By this he set of a new strategic option in music and entertainment.
Then he came with the iPhone in 2007 and the MacBook

Because of all these innovation I found that Steve jobs continuously transforming there products and making a new plan for the customers.

PEER FEEDBACK

Communication

Communication is the process of exchange and flow of information from one person to another. Effective communication is a two way communication, in which the receiver gets the exact information that the sender transmitted. Communication is the very essential factor of leader because without good communication skill leader can’t convey his suggestions and decisions to the followers or he can’t lead them. Communication is of two types verbal and nonverbal. According to Mehrabian ‘’in face to face communication other people understands us only 7% by words we use, 38% from our voice and remaining 55% from body language and facial expressions.’’

(Mullins, L.J. 2010:230)

Peer feedback

In my group work my group mate and I discussed about the communication skills and the importance of communication in leadership. After that discussion we gave feedback to each other, in which I got average comment. According to my group members I have an ability to express the thing but I can’t elaborate clearly because I speak in a slow voice and the listener can’t get me clearly.

Motivation

Motivation is the process of stimulating someone to use his willingness for fulfilling the desired goal.

A leader motivates their followers by praising them or by giving them reward like bonus, incentive, promotion etc. In Maslow’s Hierarchy Needs Theory he defines five needs of the people. He arranged these needs in a hierarchy order i.e. physiological needs, safety needs, love needs, esteem needs, self- actualisation needs.

(Mullins, L.J. 2010:261)

A good leader is a good motivator he always inspires the individual by different theories of motivation.

Peer feedback

During group discussion my group members gave me the positive feedback because they knew that in our finance assignment I helped one of my group member who find some problem in relating the ratios of the company with the economic factors, as I have a commerce background I helped him by giving theory and the proper link.

Self-confidence

Leadership grows from self-confidence, it is the fundamental basis of leadership. Leadership is about having confidence to make decisions. The group members or the followers can step forward towards the desired goal only when the leader is confident. So the leaders confidence is directly proportionate to the followers. It acts like a bridge between person and its goal.

Peer feedback

My group mate thinks that I am mediocre in self-confidence because when I am giving my strategy presentation I am not using my body language confidently and I am hesitating to give presentation. I’ll take that comment as a gift and try to increase my level of confidence.

Delegation

Delegation is the capabilities or knowledge of the person and issuing them a task, it also includes three concepts i.e. authority, responsibility and accountability. Delegation enables a leader to develop the performance of the followers to reach the desired target by making the best use of time.

Peer feedback

In my group activity I gave suggestions to my group and they observe it. When I get the chance I gave my suggestions to delicate the work. They found my suggestion an average because some time I didn’t find the strength of few team members in different tasks. So in some cases I am not able to assign a task to the right person.

CONCLUSION

A leader is a person who influences other people to accomplish the desired goal, leader accept challenges takes risk to remove hurdles for his subordinates, he had a different styles for different situations. A leader is a role model for the organisation.

With the help of the feedback given by my group members I know what are my strengths and weaknesses, because of them I know what are the obstacles for me to be a good leader.

REFERENCES

(Yukl, G. (2010:26), Leadership in Organizations: Global Edition, 7th Edition, Pearson Higher Education)

Mullins, L.J. (2010), Management and Organisational Behaviour, 9th Edition, Pearson Higher Education

Mullins, L.J. (2010), Management and Organisational Behaviour, 9th Edition, Pearson Higher Education

http://psychology.about.com/od/leadership/p/leadtheories.htm, (22 may 2011 )

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Entrepreneurial Management & Innovation at WIPRO

Introduction to the organization

Wipro was founded in 1945 in India and is currently diversified from producing vanaspati oil during its initial set up to Information technology, consumer care, lighting, engineering and health care sectors. The company has a long history of budding from independent entrepreneurship to corporate entrepreneurship after its diversification. Though founded during the early 20th Century, this company came before economic liberalization and adroitly used the opportunities offered by deregulation to grow businesses. At the same time, they built strong organizational capabilities such as project management, quality of execution and speed. Arguably it is one of the few companies in India that changed its products and services with the pace of technological change and need. Wipro deals with business in IT services, Product engineering solutions, Technology infrastructure services, Business Process Outsourcing and other consulting related services. As of 2010 the company has employee strength of more than 100,000 and is classified as a large company in the IT sector.

Currently the organization is diversified into many businesses with Information Technology services playing a major role in Wipro’s success. Today the Indian IT companies namely TCS, Wipro, HCL are renowned in the global market for their services. The various external factors leading to this situation include the Indian education system, high quality engineers, low cost of creation and high technological infrastructure.

Approach to the document

This report defines the various kinds of innovative outcomes in Wipro and how it evolved over 50 years to its current state that can be classified into the OECD innovation model. After this a few factors that have led to these innovative outcomes have been discussed and further classified as facilitators or barriers. Based on these observations a few recommendations are also provided to improve corporate entrepreneurship at Wipro.

Definition of terms

Academicians and practitioners have defined corporate entrepreneurship in many different ways in the existing literature. A number of authors emphasize that entrepreneurship primarily acts in underpinning innovation (Drucker, 1985b; McGrath, 1996; Stevenson and Jarillo, 1990).

According to Schumpeter (1934) Innovation is

1) The introduction of a new good or a new quality of the good

2) The introduction of a new method of production

3) The opening of a new market

4) The conquest of a new source of supply

5) The carrying out of the new organization of an industry

It can be differentiated between 4 types of innovations, namely “Product Innovation”, “Process Innovation”, “Marketing Innovation”, and “Organisational Innovation” (OECD, 2007). Corporate entrepreneurship is defined as the effort of promoting innovation from an internal organization perspective, through the assessment of potential new opportunities, alignment of resources, exploitation and commercialisation of said opportunities (McFadzean et al 2005).

Corporate Entrepreneurship (McFadzean, 2005)

From 1945 – 2000 individual entrepreneurship

Azim Hasham Premji, the chairman of Wipro, was called upon to manage Wipro when he was 21 years old at the sudden demise of his father in 1966. He has steered the company to a rapid growth since then. In the 70’s, he realized a growing demand for computers in India with a few manufacturers. The company had no knowledge about computer manufacturing but Premji decided to venture into this and decided to collaborate with scientists from the Indian Institute of Science (IIS) to manufacture hardware and later software (when the Indian market was liberalized in 1991). Under his leadership, the fledgling US$ 2 million hydrogenated cooking fat company has grown to a US$1.76 billion IT Services organization serving customers across the globe.

Value based leadership

Premji has established a strong value system in Wipro and believed that values not only helped in achieving success but also made that success more enduring and lasting (2003). Based on the vision created by the leader the organization made its path towards diversifying into various sectors and successfully innovating. Below are the milestones in the value based leadership that led to its growth until 2000

1977 – WIPRO was renamed to Wipro products limited due to its wide range of products

1970’s – First Indian company to manufacture mini computers

1980 – Wipro Technologies was created to manufacture computer hardware and related software

1988 – Wipro Biomed was established to market and service bio-analytical and diagnostics instruments. In 1989 it turned into a joint venture with GE and launched Wipro GE Medical systems limited

1998 – Premji decided to undertake an image building exercise for Wipro and adopted the rainbow sunflower logo and the tag line “Applying Thought”

1999 – First Indian company to receive the SEI-CMM level 5 certification which would help the company in global business development.

All these initiatives led by the leader made Premji one of the top 30 all time great entrepreneurs in the world (Business week, July 2007). The magazine said, “After making the company profitable and expanding from food oil to other consumer goods, Premji led Wipro into the nascent tech economy in the 1970s. Premji is also a hands-on manager involved in day-to-day operations, even making sales calls himself”.

He believed in empowering people allowing them to express their ideas and raise voices freely. There revolutionary policies would help shape the leaders of tomorrow. Employees were free to give feedback in a transparent system and the management at Wipro learnt what was hampering team performance and what could be done to rectify any problems.

Corporate entrepreneurship from 2000 onwards

From 2000 onwards the company focussed on innovation as a measure to sustain its competitive advantage. Since the launch of innovation initiatives in 2000, Wipro had emerged as one of the strongest players in the Information Technology (IT) industry. The company offered a comprehensive portfolio of products based on innovative solutions. Innovation was a prerequisite at Wipro since it believed that this was essential to achieve growth and competitive advantage. It was one of the values on Wipro’s promise statement that said, ” With utmost respect to human values, we promise to serve our customers with integrity through innovative, value for money solutions, by applying thought day after day.”

2000 – In September Wipro established ePeripherals Limited (Wep) diversifying into IT related businesses.

2004 – Wipro’s innovation initiatives focused on the publishing industry resulted in huge success thus expanding the solutions to other areas – finance, insurance, and manufacturing. 900 employees working towards developing innovative business solutions (Business Week, 2006)

2007 – As of March 2007, innovative initiatives contributed to 7.5% of the toal revenues. Had a target of 10% by 2009 and successfully achieved it.

Innovation council

Soon the innovation council was formed and the approach aimed at soliciting ideas from the employees. The collected ideas from employees were discussed at the IC with top management reviewing the proposed ideas and analyzing how they would help the company accelerate growth and increase the quality of its new products. Thus it offered a bottom up approach to innovation although the feasibility was considered by the top management. And with selected ones, the company granted funding, technology and resources to bring into action. This encouraged the employees to suggest more innovative ideas and by the end of 2006 the council had 200 permanent employees to handle requests.

Working framework for innovation at Wipro

The innovation initiative at Wipro began with in depth study of successfully innovating companies like Nike, 3M Technologies and Home Depot. A 2 member team was formed to consult with academicians, experts, industrialists to chart out an innovation initiative. However after thorough examination it was observed that no existing innovation models could be replicated at Wipro. Hence by adopting a ground-up approach a focussed innovation model was built based on the requirements of the company also considering authorized customer ideas. According to Oslo Manual for measuring innovation there are 4 types of innovation product innovation; process innovation; marketing innovation and organisational innovation. However the working framework of innovation at Wipro classifies innovation at Wipro as Process Innovation, Technology Innovation, Delivery Innovation and Business Innovation.

Applied innovation framework

Wipro’s applied innovation was a 360 degree approach to business that focussed on four domains – business, process, technology and delivery. This would help Wipro technologies work collaboratively with its clients to reduce the cost of a project, speed up the process of delivery and identify new opportunities for business.

Innovation at Wipro (Divakaran Mangalath, 2006)

Process innovation

As part of its innovation process Wipro applied the principles of lean manufacturing and six sigma to its process of software design and development. This helped it increase productivity by 10% since it reused tools and components. It was evident that after lean principles of engineering were applied to over 700 projects, 20-30% savings were recovered for the company (director’s report, 2007).

Delivery Innovation

This included the software factory model and the global delivery model. The factory model integrated several IT functions into a centralized supply chain allowing common areas of work to be grouped for better quality and time saving. Wipro observed 10-15% reduction in cycle time of demand to delivery of products. It was globally used across projects and Wipro was credited with pioneering the virtual distributed software development model that enabled companies to manage large projects through virtually distributed teams.

Technology innovation

The company was involved in creating IPs (Intellectual Properties) that effectively enabled its customers to reduce time in the product life cycle and improve the success rates of the products. Eg: the company developed a plug-n-play patent and IP that helped reduce the product’s time-to-market by 20-25%. Also they were the largest bank of patents in bluetooth, wireless LAN and IEEE 1394.

Business innovation

To improve its relation with customers, the company focussed on business solutions that were specific to the related industry. Wipro’s business innovations included Data Privacy and Master Data Management, Clinical Data Management, Integrated Publishing platform, vendor managed inventory, retail pharmacy, etc. Wipro also developed the GCC (Global command center) with IT infrastructure for its customers. The customers were happy to monitor, diagnose, store and secure applications as and when needed.

The outcomes of corporate entrepreneurship

In 8 years, by the end of 2008, innovation became an integral part of product development process. Since the cyclic processs has been inculcated in the employees, the “time-to-market” was significantly decreased for new products and also the products used leading-edge technology.

A work flow solution – Flow-Brix was estimated to generate revenues in the range US$ 75,000 – US$ 1 million.

Innovation had spread across all sectors of the organization and i-Desk was the first one to enable easy HR management – by a collaborating workplace tool for workflow solutions for publishing.

All these innovation initiatives have been fruitful and also helped the company attract prospective employees to fill 29% of vacancies in 2006 (Business week, 2006)

Hence it was certain that the innovation process enabled a strong product portfolio and also brought good revenue streams. In Wipro technologies, the company was focussing on consultancy services which would further enhance its image in the global software industry.

Internal organizational factors to consider for successful innovation

Effect of leadership

In Wipro it was not only recruiting the right kind of people, but also in proper training of its people. Employees were mandated to frequent internal training sessions with major responsibilities showered on them although they may not seem well prepared for the role. Premji (2005) defined 8 leadership qualities which were made a standard against which new employees would be recruited and trained. He believed that training and development at various stages were designed by mapping people’s competencies to specific roles in the Life Cycle Stage Development Plan.

Innovation Culture

Premji also placed utmost importance on innovation and creativity in developing a successful organization. Stressing the importance of innovation for the overall development of the organization, Premji said, “Innovation is essentially the application of high creativity. It need not be restricted to just products; it applies to services, employee attitude and across all levels. Innovation is a fundamental mindset pursued seriously by an organization. It is imperative to imbibe the culture of innovation”(Manu B. 2006). Analysts report that the open and supportive culture at Wipro gives employees the opportunity to develop their skills and as a result, contribute more to the organization.

Management practices

In order to come out with innovative products and services, the top management at Wipro committed itself to fostering innovation in the organization and encouraging employees to come out with innovative ideas.

Value system

The company also strove to make it more customers centric. The company believes in the objective of “customer-in” where the voice of the customers is built in the products rather than being “product-out” where the products are sold by marketing its features to the customer. Premji also believed that this value system has to remain intact even after his tenure which was openly admired by the competitors.

Organizational structure

In Wipro the organizational structure was also responsible for carrying out innovation initiative in selected projects. The company emphasized the commercial viability of an idea along with innovation. The concept was to create components with Intellectual Properties (IP) that would generate revenues over a period of time rather than one-time revenue from projects.

Innovation strategy

Another approach to innovation involved executives of several industry vertical business units identifying new technologies that would be of importance to their clients in the near future. The objective was to have expertise in the new technologies and come up with the products and productive services that could be patented by Wipro. These centres also work with research institutes, technology providers and also provide a platform for the growth of the employees. The company was able to launch new products continuously due to its innovation strategy, which considerably reduced the time between idea-generation and final product development.

A few hindrances to effective innovation

Competitive rivalry

WIPRO was able to produce hardware and software for the domestic market, however due to high competition and low quality; they decided that they could not export their products in a market that had the niche products from the big companies. They were not ready to take the risk of competing with IBM, Intel, and Apple and decided to use the opportunity where doors were open in the Indian market. If in the process, they were able to attain the quality as these giants, they could have made it to the bigger markets in no time and could have proven cost effective than other options. But due to unavailability of high quality raw material and skilled resources, they had to limit to the domestic market.

National culture

India is a developing nation and it takes time for technological changes to occur. Also the initial cost of hardware and software related to new technology is very high and not affordable to most projects. Hence although the Innovation council decides on feasible innovative ideas posted by employees, quite often they are rejected due to unavailability of resources in the country. However the company is striving to compete with global competitors in the technological field and this barrier can cause a major impact on the innovation strategy.

Recommendations

Top down approach

An entrepreneurial vision indicates the strategic intent of the organization. Stein (2002) proposed that the most admired companies set challenging goals. This vision encourages individuals to hold informal discussion with colleagues, friends and share the knowledge that they bring with different project experiences. This helps refine the idea based on the critical analysis by more than one person. Thus the vision setter actually motivates employees to strive to excel beyond their capabilities and routines. Although innovation and creativity cannot be forced on employees, this provides a platform to discuss, relate and generate new ideas. This continuous innovation is also possible only when the employee understands and accepts the vision and strives to deliver it.

Team based activities

In Wipro technologies project work is also carried out in teams. This inculcates an team based culture for working among employees. Although the employee is not forced to discuss innovative ideas within his team he can depend upon forums to find people with similar interests. As part of knowledge sharing the company encourages participation in forums and blogging. Thus a webbed structure is created in sharing ideas. For example, people working for different projects but with similar technological backgrounds can rely upon the forums for their needed expertise. In this way simple tools created in one project can be easily passed on to other projects with similar requirements effectively reducing time to collaborate with the Innovation council. This can also be seen as a knowledge management initiative that fosters innovation.

A new perspective

The organization can look upon innovative ideas as a change management process. The organization has keenly created the Innovation council to take care of the process. However the acceptability of existing teams to these new ideas is not calculated as a risk. People could be inflexible in accepting a novel way of doing business. They are more comfortable with the routine methods and could prove a failure to the case. Along with innovation management the organization should also consider change management as part of the culture. This would improve acceptability of ideas and keep the cyclic process of innovation going on.

Conclusion

Wipro which began with the success of an individual entrepreneur has matured to a corporate entrepreneur that fosters innovation. The innovation discussed about Wipro technologies in particular can be applied to other industries too. Analysts feel that these internal organizational factors – culture, leadership, strategy give employees the environment conducive for continuous innovation and contribute more to the organization. However, the company has to rethink of its methods since close competitors like TCS, Infosys and CTS are also making huge investments in innovation. Hence with increased competition, it is a challenge for Wipro to sustain the current position of the innovation leader in the Indian market.

References

Azim Premji, “8 Steps to Excellence”, The Smart Manager, January 2005.

“Azim Premji’s Interview with IIM Bangalore’s S.Krishna”, www.azimpremjifoundation.com, March 2003.

“Director’s Report,” www.moneycontrol.com, March 2007.

Divakaran Mangalath, “What Makes Innovation Work,” www.wipro.com, December 2006.

Drucker, P.F. (1985b), Innovation and Entrepreneurship: Practice and Principles, Heinemann, London.

Elspeth McFadzean, Andrew O’Loughlin, Elizabeth Shaw, (2005) “Corporate entrepreneurship and innovation part 1: the missing link”, European Journal of Innovation Management, Vol. 8 Iss: 3, pp.350 – 372

Gupta, A.K. and Govindarajan, V. (2000), “Knowledge flows within multinational corporations”, Strategic Management Journal, Vol. 21 No. 4, pp. 473-96.

Jon Tozzi, “The Greatest Entrepreneurs of All Time,” Business Week, July 2007.

Manu A B, “Premji on Innovation, Creativity,” www.rediff.com, February 16, 2006.

McGrath, R.G. (1996), “Options and the entrepreneur: towards a strategic theory of wealth creation”, Academy of Management Proceedings, pp. 101-5.

OECD (2007): OECD Science, Technology and Industry Scoreboard 2007, Organisation for Economic Co-operation and Development, Paris, p. 94.

Stein, J.C. (2002), “Information production and capital allocation: decentralized versus

hierarchical firms”, The Journal of Finance, Vol. 57 No. 5, pp. 1891-922.

Stevenson, H.H. and Jarillo, J.C. (1990), “A paradigm of entrepreneurship: entrepreneurial management”, Strategic Management Journal, Vol. 11, pp. 17-27.

Schumpeter, J.A. (1934): The Theory of Economic Development, 13th Printing 2007, New Jersey: Transaction Publishers.

Wiklund, J. and Shepherd, D. (2003), “Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses”, Strategic Management Journal, Vol. 24, pp. 1307-14.

“Wipro’s New Groove,” www.businessweek.com, February 17, 2006.

“Q&A with Wipro’s Azim Premji,” www.businessweek.com, November 27, 2006.

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Free Essays

International Human Resource Management

INTRODUCTION

The essay will be focused on discussing the Network Society as a new type of Social Structure or Organization of the Information Age. I will be using Castell’s theory on The Information Age to explain how the Network Society affects culture, individuals, institutions and various societies around the world.I will also touch on the Power of Identity, what it entails and its connection to various individuals in the global business environment…

After this I will talk about cross cultural management, its challenges and how it is implied in the business environment, analyzing the impact the theory of the Information Age has on this type of management and its challenges.

I will also discuss the critiques of other theorists to this Castell’s theory and conclude with the negative impact of globalization and the need for cross cultural management in organizations.

First and foremost I will touch on a relevant theory of globalization that relates to the Information Age and Cross Cultural Management.

THEORY OF GLOBALIZATION

There are various theorists, who have given their opinions and views on the theory of globalisation. I am going to phrase a few of them and focus on only one of these theories for the purpose of this essay.

“Anthony Giddens (1990: 64) ‘the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa’. “

“Globalization refers to “the compression of the world and the intensification of consciousness of the world as a whole” (R. Robertson, Globalization, 1992: 8).”

Robertson sees the globalisation theory as the coming together of the world as a single entity through a set of global ideas and putting aside the distinctiveness of cultural, societal and ethnic differences to be used in the home environments and during academic discussions

“From the social theory perspective, globalization involves the flows of commodities, capital, technology, ideas, forms of culture and people across national boundaries via a global networked society “(Castell’s, 1996, 1997, 1998).

“The transmutations of technology and capital, work together to create a new globalized and interconnected world. “(Castell’s, 1998)

Manuel Castell is the theorist that I will be focusing on in this essay. He talks about the theory of the network society, which is an information based society where everyone and everything is connected through digital networks. The networks are the people who control or rule the network society; they are the elites of the society who have the upper hand, are more knowledgeable and have power over the excluded individuals.

“A network society is a society whose social structure is made of networks powered by microelectronics-based information and communication technologies.” (Castell’s, 1996)

“The Net stands for the new organizational formations based on the pervasive use of networked communication media. Network patterns are characteristic for the most advanced economic sectors, highly competitive corporations as well as for communities and social movements. “(Castell’s, 1996)

The Network Society is an emerging social society or structure whose communications rely on digital networks. A digital network being global means that a society running on them would be a global society i.e. The Network Society is a Global Society.

The Network Society came about as a result of the ever changing society which occurred due to the dramatic changes in technology which are controlled by the networks.

Castell explains that although everyone is affected by this society, it doesn’t mean that everyone is included in it. People who aren’t part of it try to defend themselves from it. He cites the reason for everyone being affected by these networks as the fact that all central activities that manipulate and form human life around the world are being organised by global networks.

The Network Society works on an Inclusion/Exclusion basis; this is a feature of it and while it searches for important add-ons that will benefit the network, it will also bypass any activity, territory or person that will not contribute to the goals or tasks assigned to the network.

Part of Castell’s assumptions is the fact that under the network society, there is no class among individuals in our society and that the powers now lie in the hands of the networks.

With the network society, there becomes a need for individuals to affirm their identity; this is known as the power of identity. People tend to search for their identities in order to give their lives a source of social meaning. This is a reaction got mostly from the individuals who have been excluded from the network society. Castell realised two types of reactions from these people. They either make up their own networks or exclude the networks from their lives.

This power of identity is also known as the Self.

“The Self symbolizes the activities through which people try to reaffirm their identities under the conditions of structural change and instability that go along with the organization of core social and economic activities into dynamic networks.” (Castell’s, 1996)

CROSS CULTURAL MANAGEMENT AND CASTELLS THEORY

WHAT IS CROSS CULTURAL MANAGEMENT?

CROSS CULTURAL MANAGEMENT

“…is a system designed to train people in the global business about the variations of cultures, practices and preferences of consumers around the globe. It poses as a challenge for companies who participate in the global market. As time passes by, the diversity in culture, practices and preferences significantly increases, and so is the need for cross-cultural management, to be able to bridge the communication gaps for every culture.“Error! Hyperlink reference not valid.

Cross Cultural Management is the examination or assessment of the human behaviour from an international perspective.

With cross cultural management, managers are aware of the different cultures that exist in different industries in different parts of the world. It realises and tries to manage these different human behaviours, culture and communication issues so as to bring people together without any disputes or problems.

This information age has brought about the rise of technology and the use of the internet. This network society has changed the way businesses operate; whereby almost every part of an organisation is controlled by some sort of technology. Most jobs are now done through the internet by some e-commerce organisation, which in turn reduces the number of physical labour needed.

With the rise of the global society, cross cultural management is becoming more essential for global companies to be successful with their employees as well as their consumers. It is needed to tackle the challenges that any global business might face in relation to culture and human behaviour.

In order to tackle some of challenges brought about by these changes in regard to culture and human behaviour cross cultural management is essential.

Some Cross Cultural Challenges that could occur are:-

Mixed cultures and languages brought about by globalisation

The recent growth and need of the internet as a part of management and easy processing

The increasing need for a knowledge worker in knowledge driven organisations

The increasing need for flexible workers and jobs

There are many more challenges but the network society being a global society has helped to deal with some of these problems. Due to the compression of time and space, companies find it easier to employ the people that will be relevant for the required jobs.

Also with the individualisation of labour and the growing flexibility of workers, they are able to adapt and adjust to the growing temporality of jobs. Companies now have the option to choose either part time workers and pay them for the hours worked rather than employing full time workers who are expensive and are not required most of the time.

Castell talks about the network society sourcing valuable add-ons that can contribute to the goals and objectives of the network to integrate into its system and excluding those it has no need for who he says make up the ‘irrelevant planet’, this feature of the network society has contribute to some modern business challenges where there is the need for knowledgeable workers.

He says that the work process is a globally integrated but labour has become individualised and therefore has no class again as ultimate power goes to those that are in charge of the networks and determine what happens in it.

But his theory also says that labour is divided into two; the self programmable and generic labour. The former is skilled and flexible with the ability to learn new things, processes, tasks are able to adapt to change and are knowledgeable while the latter is unskilled and can be easily exchanged or disposed of.

There are many critiques towards Castell’s theoretical assumptions. Many theorists believe that our society is still divided into classes and are against the faceless capitalism which Castell talked about.

Theorists like Webster and Garnham believe that the network society is not a new type of social structure or system, and that it has been in existence over time. They argue that this network society is a gradual development of the former industrial society and is not completely a new one.

They also argue that the society is still in the hands of the capitalists, as they are still the elites who have access to technology and education, and the members of this capitalist group are heading companies in the top managerial positions. The people in this positions are who Castell says are in charge of the networks so therefore the capitalists still matter in the society.

It is also difficult to accept his grouping of labour, as the people in the groups do not share the same values or interests.

CONCLUSION AND RECOMMENDATIONS

However globalisation can sometimes lead to the exploitation of workers in some third world countries that offer cheap labour. Many of these workers are paid less than the normal UK or US standard of payment, making the big international companies exploit them, and some of them do not offer job security or workers rights.

With this network society business do not consider the interests of their workers and are more interested in the opportunities and goals of the networks and look for people that they can integrate that will contribute to their goals. They pay less attention to cross cultural management.

This is not advisable to do because in order to be successful as a global company, they need to understand the cultures and practices of the countries they move into. They need to work on integrating the local workers, consumers and culture with their own organisational culture in order to be successful in that country

LIST OF REFERENCES

Castells, M. (2000).The Rise of the Network Society, Second Edition. U.S.: Blackwell Publishing

Castells, M. (1996, second edition, 2000). The Rise of the Network Society, The Information Age: Economy, Society and Culture Vol. I. Cambridge, MA; Oxford, UK: Blackwell.

Castells, M. (1997, second edition, 2004). The Power of Identity, The Information Age: Economy, Society and Culture Vol. II. Cambridge, MA; Oxford, UK: Blackwell.

Castells, M. (1998, second edition, 2000). End of Millennium, The Information Age: Economy, Society and Culture Vol. III. Cambridge, MA; Oxford, UK: Blackwell.

Webster, F. (2002). Theories of the Information Society. U.S.: Routledge

Garnham, N. (2001). Contribution to a Political Economy of Mass-Communication. In M.G. Durnham & D.M. Kellner (Eds.), Media and Cultural Studies (pp. 225-252). U.S.: Blackwell Publishing.

Manuel Castells , ‘An Introduction to the Information age’ City 2: 7, 6-16

Castells, M. (2000). Materials for an exploratory theory of the network society. British Journal of Sociology Vol. No. 51 Issue No. 1 (January /March 2000) pp. 5–24

Giddens, A. (1990). The Consequences of Modernity, Cambridge and Oxford: Polity and Blackwell.

Kiely, Ray, 1964–The clash of globalisations: neo-liberalism, the third way, and anti-globalisation/by Ray Kiely. p. cm. -(Historical materialism book series, ISSN 1570–1522; v. 8)

R. Robertson, Globalization (London: Sage, 1992)

The network society: a cross-cultural perspective / edited by Manuel Castells. p. cm.

Castells, M. 1983. The City and the Grassroots: A Cross-cultural Theory of Urban Social Movements. Berkeley: University of California Press.

http://cross-cultural-management.bestmanagementarticles.com/

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Free Essays

UK Food Waste Management following the European Union (EU) Directives

Introduction

Global warming is a well known problem facing our society today however, food waste which contributes about 30-31% of global warming is not largely recognised (EIPRO) Environmental Impact of Product. Food waste, a biodegradable waste is largely disposed in landfill due to unawareness of its effect on the environment. Methane gas is released during the degradation process of food waste and this leads to depletion of the ozone layer and eventually global warming. Food waste also leads to waste of fresh water, fuel for transport, soil nutrient and finance Humpries (2010). European Union( EU) knowing the effect of food waste to the environment and life in general has established laws and made targets to reduce food waste.

What is food waste?

Waste and Resource Action Programme (2009) defines food waste as waste made up of raw food materials or cooked materials such as vegetables, spoiled food, meat trimmings and leftovers. It can also be defined as agricultural products unused, worthless or unwanted. Examples of food waste are leftovers from our homes and food service sectors, bones, spoilt food and food that have exceeded their shelf life.

Sources of food waste

The sources of food waste have been grouped into three major sectors by Waste and Resources Action Programme (2009)

Manufacturing and Processing: In this sector food waste is unavoidable particularly with products such as meat. Bones and animal organs which may not be consumed are examples of unavoidable waste in this sector. Legislative restriction on outsize production of fruit and vegetables is another unavoidable means of food waste Commission Regulation NO 1221/2008.
Retail Sector: The sector includes all sales outlets, wholesale and retail. Food waste in this sector is generated due to overstocking of food products with short shelf lives without matching of demand, Organisation for Economic Co-operation Development (OECD) (2002). Marketing strategies (two for one deal) is used by retailers to reduce food waste from their sector however, ends up shifting the waste to household where is to enough time to consume these products.
Household and food service sector: This sector was analysed in UK by Waste Resources Action Programme (2009) as of one the major sources of food waste. It further states that almost half of food waste is generated at this sector. In disagreement with Waste Resources Action Programme, Laura and Jon (2008) argues that the percentage of food waste contributed by household and food service sector is less than half with constant development of food industries and supermarket in the UK.

European Commission (2008) reveals that unawareness of the effect of food waste to the environment, finance and percentage of waste produced by this sector to total food waste accumulated yearly as one of the major causes of food waste in this sector.

Effects of food waste to the environment

Environmental Impact of Product (EIPRO) points out that for proper analyses of the effect of food waste on the environment, research should be carried out on the general life cycle or stages of food (production, distribution transport) before and after it becomes waste.

According to Kassem (2010) food been biodegradable has lead to increase level of food waste in land fill leading to increased emission of methane gas and further depletion of the ozone layer causing global warming. Similarly, Kassem (2010) and Vidal (2002) agreed that food production consumes 70% of the world’s fresh water. The work of United Nations Environmental Programme (2009) reveals that most of the food produced ends up as waste thus leading to wastage of fresh water. In reference to Jodie Humpries (2010) other resources wasted as a result of food waste includes soil nutrient, energy put in during agricultural process and fuel for transport.

New EU directives on food waste

The European Union is a body that controls or Legislates environmental issues. Food waste, an environmental issue is under control by some binding laws. The new EU Directives on food wastes 2008/98/European Commission simplifies how food waste should be controlled or managed.

The Waste Hierarchy

Preferred Option

Least preferred management method

FIG 1 ORDER OF WASTE MANAGEMENT

Fig 1 illustrates the New EU Waste Directive Hierarchy (2008) which directs member state (MS) on the path to follow for effective management of food waste. This waste hierarchy gives high priority to waste prevention and very low priority to landfill. However unavoidable food waste can either be re-used, recycled or use for energy recovery

Article 22 of Revived Waste Framework requires member states to set up separate collection of bio- waste, treat bio- waste in ways that is friendly to the environment and use materials produced from recycled from bio- waste that are safe. The Directive also instructed member states (MS) to recycle 50% of waste from household by 2020.

Salmon (2009) points out that the fundamental laws outlined in the food waste directives (prevention, re- use, recycling, energy recovery and landfill for last resort) are been practically employed in the UK.

Conclusion

Proper management of food in UK following the European Union (EU) Directives (prevention, re-use, recycling, energy recovery and landfill for last resort) will reduce food waste disposed in landfill and eventually methane gas and global warming.

REFERENCES

Commission Regulation (EC) no 1221/2008 0f 5 December 2008: eur-lex.europa.eu/Lexuriserv/Lexurisev.do?uri=oj:l:336:0001:0080:EN:PDF

EC (2008). Green paper on the management of bio-waste in the European Union, Brussels, Belgium.

Jodie.H.(2010). The impact of domestic food waste on climate change. Retrieved March 10, 2011 from http://www.nextgeneration food.com/news/looking-at-food-waste/

John. V (August, 2002). Earth’s liquid asset. The Guardian, p.6.

Laura.B and Jon.H (2008). How to break the habit of wasting food. Retrieved March 10, 2011, from http://www.guardian.co.uk/environment/2008/jul/08/food.ethicalliving?INTCMp=SRCH

Norem. K. (2010). How to reduce food waste waste .Retrieved March 8, 2011 from http://www.suite101.com/content/how-to-reduce-food-waste-a212264.

OECD (2002). Environmental Impacts and Policy Responses.Retrieved March 10, 2011 from http://www.oecd.org/department/0,3355,en_2649_34331_1_1_1_1_1,00.html

Salmon.B (2009).The waste frame work directive explained. Retrieved March 10, from http://www.hg.org/law-firms/USA-Environmental -and-Natural-References.html.

United Nations Environmental Programme. (2009). environment’s role in averting food crisis. United Nations Environment Programme:GRID-Arendal

Waste and Resources Action Programme (2009). Household and drink waste in the UK.Retrieved March 8,2011 from http://www.wrap.org.uk/retail_chain/grocery/food/index.html

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Free Essays

Supply chain management in Starbucks and its impact on company performance

INTRODUCTION – BACKGROUND:

Supply chain management has become a hot topic over the past twenty years. Before getting into the details, we need to define what supply chain management is. Even though it has been suggested that there is little agreement on a definition for supply chain management (Burgess et al, 2006), one definition we could use could be the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al., 2001, p. 18). Companies now understand the importance of supply chain management better than the previous decades. In starbucks for example, with the increase of operational costs followed by the shrink of sales, they put into action a supply chain strategy in order to reduce their costs and maintain their competiveness in the market. An effective supply chain management could impact on the organisation’s financial performance: profitability, liquidity, and productivity or asset utilization (Christopher, 1998). A real difference “through the customer value that is created by superior service” (Christopher and Peck, 2003, p. 46) could also be generated from a successful supply chain management.

To get to that nice cup of starbucks coffee, it takes a smooth run of the supply chain to make that happen. The main reason is the fact that the journey from bean in South American or African farm to a cup in a starbucks coffee shop is a paved with obstacles. Coffee and other related commodities are to be successfully supplied from different parts of the world and conveyed to the 16,700 starbucks coffee shops, which are visited by around 50 million clients in 51 countries every week.

However in 2008, faced with the increasing costs of its functioning, the decrease of its revenues, and when the costs of its American supply chain department went from $750 million to over $825 million, they started realising that the company’s supply chain management as a whole was not effectively carrying its mission. One reason could be the high tempo at which starbucks was opening branches all around the world with their supply chain finding it hard to keep up with that pace. According to Peter D. Gibbons, who is starbucks executive vice president of global supply chain operations, the company’s growth has been so fast and in a short period of time that even the supply chain basic ground rules were not set up. The direct result of that neglects the increase of the costs of the supply chain operations in general. To get the link between costs and performance here back in perfect synchronisation, many areas have to be looked at.

According to Porter (1980), the two basic competitive approaches are cost advantage and differentiation. A well led reducing costs plan create costs advantages, while a better level of customization and service tend to boost the profitability. One of the problems with starbucks supply chain was the delivery time. This latter could be solved with a better standard of services through well-organized order capture, by making sure that the different ingredients or materials are always available etc… Supply chain management produces differentiation “through the customer value that is created by superior service” (Christopher and Peck, 2003, p. 46). And on top of that, there is a strong relation between increased levels of service and increases in sales volume and customer maintenance (Parasuraman et al, 2004). This would just prove that an effective progress on the supply chain would have a direct effect on cutting costs with still a good customer service. Such initiative is meant to diminish the business cost tariffs which would positively impact on the profitability of the company. An initiative like this would incorporate:

Reducing inventory holding costs through improved inventory management (Stapleton et al, 2002)
Identifying and eliminating non-value adding supply chain activities (Hines and Rich, 1997) and the different costs related to them.

The inventory aspect of the supply chain management is really crucial. A significant reduction of the inventory would improve asset effectiveness and exploitation. Fewer inventories also means less functioning costs related to doing inventory. Basically, a decrease in inventory positively impacts on the cash-to-cash cycle therefore more liquidity (Christopher and Ryals, 1999; Farris and Hutchison, 2002).

LITERATURE REVIEW:

Previous work exists on the tie between supply chain and the performance of a company (Christopher and Ryals, 1999). However, businesses are said to be sourcing around 75 % of the value of therir services and goods from the supply chain (Trent, 2004).

Others researches based on the effects of amelioration in the supply on the financial sidehave shown that in the short term, when we have a high level of inventory, this would have no direct negative impact on the price-to-book ratio. However in the long run it could get to a reduced stock market value (Chen etal, 2005). In the retail industry for example, a connection between the floor space and inventory show better operating stores are the ones with a higher inventory turn per unit area (Raman and Gaur, 2005). It is important to find the right amount of stock to have; because too much stock is as bad as too little stock as they both affect the business performance. Businesses with low (not lowest) levels of inventory would be more likely to have a good long-term stock market performance (Chen et al, 2005); but it could also be due to better inventory management strategies.

Even if business performance is evaluated by market and financial criteria, a short-term approach of the supply chain management objectives would improve the efficiency and diminish the lead time and level of inventory; while on the other hand, a long term approach of supply chain management objectives would raise market share (Koh et al.2007). business performance is is affected through supply chain management through different elements such as : lead time, inventory turnover, product return, sales level, cost reduction and meeting customers’ expectations (Petrovic-Lazarevic et al. 2007)’

Lead time: time elapsed from the moment the customer makes an order and when it is completely satisfied (Chan 2001). Businesses are under pressure to reduce their manufacturing lead time. Shorter lead time means that firms will be able to swiftly react to changing market demands (Wadhwa et al., 2005; Chan and Qi, 2003).
Inventory turnover: this measures the speed with which goods move through and are replenished by the sytem (Sahay and Mohan2003).
Product return: to capture the market and keep the customers satisfied, it is crucial for a business to have good quality products (Chan and Kumar 2007).
Sales level: this indicator help showing whether the business has a good market share or not.
Cost reduction: in (Fawcett et al. 2008) it is clearly shown that a well operated supply chain will considerably help reduce costs.
Meeting customers’ requirements: at the end of the day, this is what the business is for. It is all about satisfying the clients and going beyond its expectations. As ( Huang et al 2002) mentioned, development in the supply chain management leads to a better response to customer expectations.
Innovation performance: a good supply chain management network allows businesses to share information both internally and externally. This help improving the company performance.

There are other works that also show the relationship between supply chain management and an organizational performance (Petrovic-Lazarevic et al., 2007). Others researches based their study on almost 200 firms realised that supply chain management could lead to competitive advantage and at the same time ameliorate the business performance (Li et al. 2006).

RESEARCH OBJECTIVES AND RESEARCH QUESTIONS:

This project proposes to prove the importance and benefit of supply chain management within starbucks organisation and the vital role it plays for any business performance. Emphasis will be on the period from October 2007 onwards, since this is the period during which starbucks’ sales started going down, and its supply chain costs rose.

Particularly, concentration will be on the following questions:

What is starbucks supply chain management policy
What is starbucks corporate social responsibility
What are their coffee purchasing and supply chain practices
What is the effectiveness of Starbucks operational strategies
How does their supply chain management affect their expansion strategy

RESEARCH AND DESIGN:

The methodology which will be used here in order to cover the research objectives will for the most part be based on qualitative research through semi-structured interviews so that i will still be able to come up with questions during the interviews. If well led, these interviews could also help me collecting specific information needed to answer the research objectives.

There will also be use of quantitative methods, which will be presented through charts and diagrams.

DATA COLLECTION AND ANALYSIS:

Primary data will be collected from interviews while secondary data will be collected from published documents on supply chain management, measurement of company performance from responsible and respected publishers such as supply chain digest, world trade logistics journal, supply & demand chain executive, logistic quarterly, 3PL wire, DC velocity. Data will also be collected from the university of Westminster database system.

Demands for interviews are being arranged. If accepted, they will be likely to last for an hour and will probably be conducted in July 2011.

Data will be analysed through the use of grounded theory. That will help verifying the hypothesis and identify the potential policies being implemented to easily solve them. Data will also be analysed through the process of going through and reading the data.

PRELIMINARY INDICATION OF RESULTS AND CONCLUSION:

Expected results as suggested in the literature review are anticipated to show the importance and positive effect of supply chain management for Starbucks Company.

TIME SCALE:

Between the submission of the proposal and the submission of the project, i will arrange to meet up with my supervisor at least 4 times per month until the end of October. The project should be finished by the end of November when i will submit it.

REFERENCE:

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Free Essays

Logistic and supply chain management in retail

Introduction:

In today’s rapidly changing business environment particularly in retails industry, there are ever-greater demands being placed on retailer and how they deliver goods (products) and services to their customers quicker, with greater added value, to the correct location, with no relevant inventory position, reduced damage or outdated goods, lost of earning to mention few. However, customers themselves are becoming more sophisticated, wanting more quality, design, innovation, choice, convenience and service, and they customers want to spend less money, effort, time and possibly with no risk. These has force more retailer to adopt continuous improvement, highly competitive and dynamic for survivor and sustainability. Hence, Supply Chain Management (SCM), Logistic and Value Chain management became the main topic for improving efficiency, revenue generation, retain customer loyalty, customer services and satisfy customer’s need.
The supply chain in grocery retail industry consists of different departments, ranging from procurement of materials to customer service. Supply chain management means transforming a company’s “supply chain” into an optimally efficient, customer-satisfying process, where the effectively of the whole supply chain is more important than the effectiveness.

Background:

Lidl is a German chain of discount grocery stores that operates in numerous countries across Europe, in UK alone Lidl have about 568 outlets / supermarket stores. Lidl’s largest market is Germany where it competes with fellow German discounter and arch rival Aldi. In reading the paper, one must examine and understand the trend and shifts in retails industry business thinking. It is imperative to know the six major shifts in grocery retails business thinking that may suit Lidl grocery stores.

The first shift is from cross-functional integration to cross-enterprise integration.

The second: from physical efficiency to market mediation;

The third: from supply chain to demand focus;

The fourth: from Lidl single-company product design to collaborative, concurrent product, process, and supply-chain design;

The fifth: from cost reduction to breakthrough business models; and

The sixth from mass market supply to tailored offerings.

Each shift entails has its own components whether it be integrating within or integrating across Lidl – the groceries retailer company.

Supply Chain Management- Definition:

Harrison and Hoek (2011, p.32) defines supply chain management as “SCM encompasses the planning and controlling of all processes involved in procurement, conversion, transportation and distribution across a supply chain. SCM includes coordination and collaboration between partners (suppliers, intermediaries, third party service providers, grocery retails outlets and customers). In essence, SCM integrates supply and demand management within and between companies in order to serve to serve the needs of the end-customer.”

Supply chain management (SCM), also called logistics network, includes suppliers, industrialized centers, warehouses, depots or distributions centers, and retail outlets, as well as unprocessed materials, work-in-progress stock, and finished goods that run linking the facilities. SCM is all about having the right product in the right place, at the right price, at the right time and in the right condition.

In general terms, Supply chain management (SCM) is the process of planning, implementing and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, finished goods, delivery to various retailer depots / distribution centres and to all retail outlets for consumption.

Opportunities enabled by Supply Chain Management

These following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented.

Fulfillment: Ensuring the right quality and quantity of products are delivered to retail outlet shelves for sale at the right time. This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows retailers to constantly see what is on stock and making sure that the right quantities are ordered to replace stock

Womack and Jones (1996) describe the lean enterprise as collaborative form spanning the supply chain and argues that supply chains should be organized around value streams to eliminate waste, responding to the pull of the product through the supply chain by customers, to eliminate stocks by organizing value-creating activities around flow, and further stated that the advantage is also to reduce markets to stable, predictable demand through collaboration and co-operation, rather than the turbulence created by conventional inter-firm competition and aggressive uncoordinated sales promotions.

Logistics: Keeping the cost of transporting finished product to their respective outlet as low as possible consistent with safe and reliable delivery. Here the supply chain management system enables retailer to have constant contact with its depot/distribution centre and depots team, which could consist of trucks, trains, or any other mode of transportation. Christopher. M, (2005, p.4) defined “Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organization and the marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of orders”. While Piercy (1997) explain that efficient consumer response is based on ‘co-operative partnerships’ between retailers and manufacturers who commit to collaborate in reducing costs in supply chain. Piercy (1997) highlighted efficient consumer response is a powerful weapon which demonstrably reduces supply-chain costs but criticized for reducing consumer choices and competition and restricting manufacturer strategic development.

Charles Dominick (Next Level Purchasing.com – President) explains, “the three types of entities of a supply chain: customers, a producer, and the producer’s suppliers. The extended supply chain includes customers’ customers and suppliers’ suppliers. SCM oversees and optimizes the processes of acquiring inputs from suppliers (purchasing), converting those inputs into a finished product (production), and delivering those products – or outputs – to customers (fulfillment).”

Supply chain management strategies were designed to cut the number of suppliers and reduce purchasing costs; but wasn’t to manage supply risk. Even today, while struggling through a global recession, there is little agreement between buyers and sellers at major manufacturing firms on what constitutes information technology.There seems to be a universal agreement on what a supply chain is.Some describe it as a network of autonomous or semi-autonomous business entities collectively responsible for procurement, manufacturing, and distribution activities associated with one or more families of related products.While reading the passage many consumers are still concerned about what supply chain management really is and how it is applied to its companies.

Value-chain Analysis:

Porter (1985, p.114) identifies five primary activities which add value to the final output of a retail company: Inbound logistics; Operations; Outbound logistics; Marketing and sales activities and Services. In support of the primary activities of the value-chain, Porter also identified support activities. These are procurement, human resource development, technological development and infrastructure; all these feed into each stage of the primary activities of the value-chain. This value-chain gives room for logistic and supply chain management improvement and provides insight into retails competitors

Figure 1. The Value Chain

Lehman and Winer (1991) suggest concentrating the value-chain analysis under five key competitor abilities: Ability to conceive and design; ability to produce; ability to market; ability to finance and ability to manage.

Supply chain management is getting a lot of attention in e-business. WhyBecause the existing supply chains are mostly outdated for the e-business era, in which inventories and costs must be eliminated wherever they are found. Traditional supply chains were designed in a time of modest competition and slow response time but for retailer such as Lidl to succeed in today’s customer-driven environment, Lidl must emulate Tesco and Sainsbury store and add value to way of delivering online sales and the logistic of supply to each customer in a value-for-money approach. Lidl have to streamline intercompany (manufacturer to Lidl depots/distribution centres) processes just as they do with processes that reside within a Lidl outlet’s boundaries. By reengineering the intercompany supply chain, corporate boundaries are becoming meaningless. The result: enormous payoffs for all partners in the chain.

Research Aim:

Evaluate Logistics and Supply Chain Management in Grocery Retail Industries in UK and identify where improvement in logistic is possible within retails firm of choice. To also examine the Impact of Supply Chain Management and identify if there is room for improvement

Objectives:

To investigate whether there is a balance between investing in front-end and back-end (from customer / shop floor to depot/warehouse and to manufacturers) operations.
To understand logistics management in Lidl, explore for efficiency and effectiveness of supply chain in modern retail stores that maintain lower inventories than traditional retail.
Explore supply chain perspective to help the UK retailers identify superior suppliers and distributors and help them improve productivity, which ultimately brings down the customers costs.
Replicate its national supply chain model in UK for global presence, taking into account the unique features of the regional market and emphasize on local sourcing of goods within each outlet.

Research Questions:

Ques. 1: Why do modern retails stores carry a lower inventory?

Ques. 2: Why do effective logistics reduces company and its customer cost in modern retails stores?

Ques. 3: How does modern retail gain a competitive advantage in the application of improved logistics and supply chain management?

Methodology:

A systems approach was planned for this research. A systems approach presumes an objective reality that can be (more or less) “discovered”, the systems approach means that the world can be thought of, and divided into different systems. Arbnor and Bjerke (1997, p.111) define a system as a “set of components and the relations among them”, where a component means e.g. a function or a department in Lidl – the groceries retailer company.

The research will involve an explicative study based on the results of a survey, which will be conducted. The questionnaire will be formulate and sent to Lidl groceries retailer’s Head Office and outlets. If very little response is attained from questionnaire, the research will switch quickly to using qualitative methods (primarily face-to-face interviews) with key industry professionals, logistics division and middle to top management. Probably statistical representative of Lidl – the grocery retailer company, these interviews when conducted may generate a set of indicative prioritize areas and provide room for improvement.

Qualitative study may be more appropriate for this research because the main research will entails a lot of information that may not be quantified, such as the Lidl SCM strategies, logistics versus SCM perspectives, differentiation of services offering and uniqueness features of Lidl (grocery retails firm).

Bibliography:

Alan Harrison and Remko van Hoek (2011), Logistic Management and Strategy: Competing through the Supply Chain, 4th edition, Harlow, England: Financial Times Prentice Hall.

Ronald H. Ballou (2004), Business Logistic’s Management: Planning, Organizing and Controlling the Supply Chain, 5th edition, London: Prentice Hall International.

Christopher Martins (2005), Logistic and Supply Chain Management: Creating value-adding network, 3rd edition, NewYork: Financial Times Prentice Hall.

David Simchi-Levi, Philip Kaminsky, Edith Simchi-Levi (2007): Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies, (3rd Edition) New York: McGraw-Hill, New York, U.S.A.

Porter, M. E. (1985), Competitive Advantage – Creating and sustaining superior performance, New York: The Free Press.

Lehma, D.R and Winer, R.S. (1991), Analysis for Marketing Planning, 2nd edition, Homewood IL: Irwin.

Simchi-Levi, D., P. Kaminsky and E. Simchi-Levi (2004): Managing the Supply Chain: The Definitive Guide for the Supply Chain Professional, McGraw-Hill Book Company, Inc., New York, U.S.A.

Monczka, R., Trent, R. and Handfield, R. (2002), Purchasing and Supply Chain Management Knoxville, United States: Thompson Learning.

Womack, J. P. and Jones, D. T. (1996), Lean Thinking: Banish waste and create wealth in your corporation, London: Simon and Schuster.

Piercy, N. F. (1997), Market-Led Strategic Change: Transforming the process of going to market, 2nd edition, Oxford: Butterworth-Heinemann.

Arbnor, I. and B. Bjerke (1997), Methodology for creating business knowledge; Thousand Oaks,

California, Sage Publications

Porter, M. (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors.

New York, Free Press.

Moss Kanter, R. (1994). Collaborative Advantage: The Art of Alliances. Harvard Business

Review, 72 (4)

Larson, P. D., R. F. Poist and A. Halldorsson (2007), Perspectives on Logistics vs SCM: A Survey of SCM Professionals. Journal of Business Logistics, 28 (1), pp. 1-24.

Charles Dominick; President & Chief Procurement Officer, Next Level Purchasing, Inc. www.nextlevelpurchasing.com

Arjan J.van Weele (2005), Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice, 4th edition, London: Thomson Learning

Mentzer, J.T., S. Min and Bobbitt. L. (2004), Toward a unified theory of logistics. International

Journal of Physical Distribution & Logistics Management, 34 (8), 606-27

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Free Essays

Supply Chain Management

Introduction – Supply Chain Management

Supply Chain Management is process of managing and developing both way relationships with the customers and the suppliers to deliver the needs, wants and customers value at low cost and environmental free to the supply chain. Christopher (1998)

Abstract of Coursework

The coursework considers Toyota Motor European sustainable green logistics as an idea can be used as element of supply chain approach. The main objective of logistics is to manage activities in such a way that meets consumer requirements at least amount. As fear for the atmosphere rises, companies must take more account of the logistics associated with climate change, air contamination and.

Hitchcock and Willard (2008), Sustainability is a business development and many organizations are pursuing it, in order to get more success than others. This coursework considers importance of create a plan to practice sustainability inside logistic of companies. The most central strategy is logistics development because includes all aspects concerned is characterization of the strategy involves the supply, production, distribution and reaches final client.

In above all we are concerned in techniques that consider both financial (gold) and ecological (green) criteria at the same time.

Logistics & Green Logistics

Logistics

Logistics is the included organization of all the activities mandatory to move products through the deliver chain. For a representative product this supply chain extends from a raw material starting place through the production and distribution structure to the end of consumption and the linked reverse logistics. The logistical activities consist of freight transport, storage space, inventory management, resources handling and all the related information dealing out.

Green Logistics

The Green or Sustainable Supply Chain is a method which is looking to reduce a product or service’s ecological track (BearingPoint 2008). The idea covers all the phases of a product’s life cycle, from the taking out of raw materials through the design, manufacture and delivery phases, to the use of the product by customers and their ultimate disposal of same. (Rodrique JP 2001)

Sustainable Logistics

It means a practice to define strategy from a value generate, because requires account reduced consumption of raw materials and release, lucidity levels, social and green responsibility, expansion of new technologies and gather the needs of the marketplace and the society in which it operates. This provides a set of activities in the supply chain and value. Hitchcock e Willard (2008).

Components of Logistics

The most common components of the logistics are

Logistic services
Information systems
Infrastructure and resources

Logistic Services

Logistic services hold the movement of materials and products from input from side to side production to customers as well as linked waste discarding and reverse flows. Most activities of logistics services are two way directional.

Information Systems

It includes modelling and administration of decision making and important issues are tracking and tracing. It provides essential data and discussion in each step of the interaction among logistic services and the objective stations

Infrastructure and Resources

Infrastructure comprises human resources, economic resources, wrapping materials, warehouse, transport and communication.

Case Study – Toyota Motor European (TME) Sustainable Logistics

Abstract – Toyota Motor European Case Study

Toyota stress changes from acceptance of tools such as Lean Thinking, especially in logistics processes. In terms of sustainable logistics, corporation focuses on greater elasticity in transport operations, specifically in Toyota Motor European, since the transportation sector is responsible for upsetting the environment, being the main cause of CO2 emissions.

Methodology for Designing & Implementing Green Logistics

In this focus, to companies build up new sustainable strategies that means changes and results to the company, by environment, communal and financial benefits. Toyota motors follow the following strategy to implement green sustainable logistics

Revolutionary environmental technologies such as hybrid (petrol and electric) drive systems
Developing a extended range of vehicles motorized by fuel efficient gasoline and cleans diesel engines
Reducing the environmental contact of all their operations
Minimizing the natural resources used in manufacture and maximizing recycling and reuse
Work with local communities to improve the quality of the environment.

The need for these investments is established in recent study by the International Panel Climate Change (IPCC, 2009), as well as the sustainability story of Toyota Motor Europe, which shows that nearly a quarter of CO2 emissions in the world comes from haulage activities, where it is found that eighty per cent of production come from cars.

Therefore, TME monitors the efficiency of their logistics operations and methods continually to make sure the most excellent solutions are being used at all times to diminish such problems.

Sustainable Logistics in Accessories Services

In 2004, Toyota began to measure the collective data of CO2 emissions to spot areas where it can make discharge reductions. To share services and accessories logistics, such achievement resulted in improvements in effectiveness and capacity and haulage modes.

Increased extra-large trailers use, which allowed carrying bigger capacity by lorry;
Alter the route to fast supply parts

This point of view of Toyota shows the sustainable background is predictable in companies and is the foundation of their concerns about the green and social resources. Thus, the structure shaped is necessary to hold up the change and take delivery of the sustainable logistics approach.

Environmental Management

It is the way to companies become sustainable and creates value to customers. The TME approach to sustainability of three key aspects: environment, finances and social, represents the live out plan in companies, to get costs and resources decrease, and competitiveness.

Logistics costs

It is essential to think about expenses and aggressive to work on sustainable logistics, by optimizing the use of resources, such as the reduction of energy utilization and waste.

In logistics, the total cost associated with the inventory consists of the following

Cost connected with inventory as received stock level
Service costs
Insurance cost
Risk costs, consisting of price associated with deterioration and damage
Cost related with scrap and revise
Cost associated with deficiency of inventory.
Reducing the social cost in transport operations by sustainable
logistics

A factor to be well thought-out is the social and green cost of transport process. Breaks down the accomplishment of measures to reduce the social costs of freight transport in a widespread way as part of cost logistically to the goals of fewer impacts to the public.

Conclusion Statement

The sustainable green logistics is attitude trade management that stays in understanding of this is a complex perception, multidimensional, that cannot be functional by a single corporate action and the creation of sustainable value requires that we take into account one of the drivers, either by sinking the utilization of raw materials and pollution, control with broader levels of precision and responsibility, expansion new technologies and meet the needs of those who are in the bottom of the pyramid of planet earnings.

A sustainability strategy should not only lead the activities growth and skills but also a form of business association with suppliers, customers, vendors, shareholders and stakeholders.

By the illustration of Toyota Motor European (TM E), sustainable logistics means the upgrading performance of all logistics operations, in a trade environment of rapid growth. This conception includes the supply chain management, manufacture process, stakeholders and cores. It can be concluded that sustainable green logistics makes it uncomplicated pro-active monitoring of the administration of waste in processes, which are key to achieving a high level of sustainable routine in transport operations. Thus, Toyota is a big example, to show that how to implement sustainable logistics, in your manufacture processes, that includes environment, finances and societal costs and possessions, involved by a effort system care with environment, public, business and chain as a part of one organization.

References
BearingPoint (2008) Supply Chain Monitor “How mature is the Green Supply Chain?”
Christopher, M. (1998) Logistics and Supply Chain Management.
Hitchcock. D, Willard .M. (2008), The step-by-step guide to sustainability planning.
IPCC (2009). International Panel Climate Change.
Liker, J. K.Meier (2007), D. Toyota Talent. New York: M cGraw-Hill 2007.
Rodrique, J.P, Slack(2001), Green Logistics.

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Free Essays

Human Capital management is a vital component in any successful business (SOURCE).

ABSTRACT

This is a study of the various approaches that can be implemented to improve staff performance and how these affect the employee’s motivation, and the organisation’s aims. Staff training, and the management of staff, remains a highly debated topic in the business market; different employees have different attitudes towards work, different commitments, and different abilities. These differences influence the way an individual functions in a work environment, and can determine how successful a business is at attaining their objectives. This study aims to analyse the particular approaches employed of Human Resource management to motivate their staff to work hard and productively.

The study will assess the various theories of “employee recognition”, as well as the different modes of this, the mode that is chosen by staff, and the modes which attain the best results.

The research will then look to investigate motivational systems, such as rewards, and recognise this as a consequence from this approach. The different reward and motivation models can affect the staff member’s perception of the business and their role within it. The study will look into how the reward system can motivate staff members to improve their efficiency at work. The study will then look at the possible challenges of reward systems, and the ways that these risks can be managed.

This research will then analyse the various ideas to motivate staff members, and the restrictions of these ideas. It will contrast the reward systems with motivation to comprehend the relationship between the two systems.

Additional targets are to locate the elements which improve and motivate staff, to comprehend the way in which these reward systems can develop the staffs productivity, as well as to gain knowledge of the ways in which these systems can develop the business’s overall productivity.

The approach taken to answer the above questions was a survey carried out upon staff members of the Royal Mail. The results of this survey were studied through the application of several key research approaches which will be given in Chapter Three.

Overall, this study shows that the improvement of staff members’ motivation and work environment, in which they are recognised and made to feel important to the business, results in better performances at work. Thus, organisations must make sure that suitable systems are in place to motivate and reward their staff.

Yet, these systems must be in balance with the business’s aims. This is because not all individuals are the same, and organisations will have to make sure that there is not one “generic approach” implemented in the organisation.

CHAPTER ONE – INTRODUCTION

1.1. BACKGROUND

The 21st century business market is a place in which there is a huge demand for efficient Human Resource management. Every company is only as strong as its workforce, and thus, HR and Human Capital management is a vital component in any successful business (SOURCE). The influences upon staff performance can be external: the threat of rival businesses, or internal: the degree of organisational ability. Human Capital management is responsible for the organisation of a business’s resources, and the handling of environmental aspects. As Marchinton and Wilkinson (2008) describe: “businesses that do not adopt efficient human resources management are likely to fail.”

In recent times, organisations have implemented and applied a variety of different studies into the ways that HR can achieve better levels of performance from their staff, as well as how this can lead to market dominance in the future (SOURCE). The factors that are considered in these studies are often: the recruitment and handling of talented workers, training systems, reward systems, and the motivational factors provided to motivate workers (SOURCES). The motivational systems can vary from business to business; while in every company staff are required to work hard and reach specific targets, the different companies have to apply different motivational systems to accommodate the differences in employee personality and attitudes. As Porter et al. (2006) state: “those behaviours are influenced by the dynamics of environmental occurrences and their personal philosophy.”

Thus, the relationship between an individual’s attitude and his working climate is what establishes the motivation for the staff member to attain their set aims. Yet, Adair (2004) §claims “motivation arises as a result of the internal urge to attain certain goals.” Therefore, if a staff member is affected by his own interests, or by his external environment, the member’s desire to achieve these goals is influenced by their “intrinsic motivations or materialistic gains as in the cases of extrinsic motivation” (Adair, 2004). The “Theory X&Y” is equal with internal as well as external motivational factors.

Ouchi established the “theory Z” which indicates that staff members will be more productive in an environment that offers the worker “a less intrusive control structure complemented with formal processes” (Mullins, 2010). The statement here suggests that a combination of management measures must be implemented to manage the intrinsic and extrinsic staff behaviour. With the locating of elements which can improve an individual’s desire to work hard, then systems of reward management must not be overlooked: “effective reward strategies helps get people to the appropriate place to do the right thing at the expected time” (Pilbeam and Corbridge, 2006). They then go on to say “that there is no one best practice to reward management, instead organisations should adopt reward strategies that best fits their mode of operations and objectives.”

1.2. CONTEXT

Established in 1516, the Royal Mail has been the dominant business in the handling of letters, parcels and mail logistics in the United Kingdom. The Royal has undergone a great amount of change since its inception: for example, the name was changed from “Consignia Holdings Plc” to “Royal Mail Holdings PLC.” The company has grown and grown, as reflected by the 25% increase in operating profit in 2010, as the company made more than ?400 million (SOURCE).

The Royal mail has more than 180 000 staff members. It is a company that is well known for its “bureaucratic approach” to handling staff members. The company looks to make sure th