Management Functions in Action: Butlers Chocolates - Case Study Example

Management Functions in Action: Butlers Chocolates Executive summary Management principles are changing day by day because of the arrival of scientific strategies in managing businesses. A lot of modern management concepts have been entered the organizational world in recent times in order to help the organizations in improving their profits and competitive power. But, the basic management functions remain the same. Planning, leading, organizing and controlling are four of the major managerial functions. If any of these functions have not been performed better by the managers, an organization may struggle to develop properly. This report is prepared based on an interview conducted with the HR manager of Butlers Chocolate; an Irish company. This report explores the importance of planning, leading, organizing and controlling for a small organization in the modern era. Table of Contents Executive Summary 2 Introduction 4 Planning 5 Succession Planning 5 Labor demand and supply forecasting 7 Recruitment and retention planning 7 Talent management 8 Organizing 8 Leading 9 Controlling 11 References 14 Appendix 15 Introduction Because of globalization, liberalization and the rapid advancements in science and technology, management principles are changing day by day. In fact change management is accepted as a principle by the modern organizations. It should be noted that cross cultural business is growing day by day and business strategies such as outsourcing and offshoring are getting more popularity at the moment. Moreover, many of the organizations forced to keep a diverse workforce because of the lack of availability of domestic labour power. Management of diverse workforce is not as easy as the management of a single cultural workforce. Concepts such as work life balancing, change management, cross cultural management, strategic management and total quality management are some of the recent developments in the management circles. In short, business strategies and management principles are undergoing rapid changes at the moment. Despite of all these changes, the core management functions remains the same. Planning, organizing, leading and controlling are the four managerial functions which are considered as the core of every managerial activity. Irrespective of the company size or the nature of business, these four managerial functions determine the success or failure of a company. Operating from North Dublin, Butlers Chocolates is an Irish company which manufactures chocolate products. It was founded in 1932 by Ms. Bailey-Butler in 1932. However, Sorensen family has purchased Butlers Chocolates Company in 1959 and since then, the company is operating under their control. The Butlers Irish Chocolates brand was born in 1984. Since then, a wide range of chocolate products such as chocolate assortments, truffles, fudge, toffee, and chocolate bar are manufactured by Butlers Irish Chocolates Company. Apart from chocolate manufacturing, the company has recently diversified into café business also. Butlers chocolate is currently marketing now only in Ireland but also in the United Kingdom (Butlers Chocolates, 2014). This paper analyses the importance of planning, organizing, leading and controlling, with the help of secondary data as well as the primary data collected from an HR manager of Butlers Chocolate Company. Planning Planning is an important managerial activity. Planning helps managers to utilize the organizational resources properly. It is often said that the planning is the brain of an organization. In the absence of proper planning an organization may not develop properly even if it has more than enough resources. Effective planning helps an organization to mobile its resources properly. According to the HR manager of Butlers Company, workforce planning is one of the most important managerial activities (See appendix). It is a process in which organizations formulate strategies for the effective utilization of human resources. The core of workforce planning is to make sure that the right number of people with the right skills is in the right place at the right time (CIPD 2012). As per the views of the HR manager of Butlers Company, the core elements of workforce planning are; ‘succession planning; flexible working; labor demand and supply forecasting; recruitment and retention planning and talent management (See appendix). Succession planning Succession planning is the process of ‘identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short- or the long-term’ (CIPD, 2013a). HR managers are responsible for providing training and development facilities to all employees. It is possible to identify the potential future leaders at the time of training or at the time of evaluation of the performances of the employees. Once the talents are identified, it is necessary to provide them enough opportunities for development. Succession planning is the tool used by the HR managers to develop potential leaders or managers for the future. Onuoha (2013) pointed out that succession planning is extremely important for entrepreneurs in developing big and well managed corporations. Succession planning is taking place internally, within the boundaries of the organization. It helps employees in an organization to get rewards for outstanding performances. Flexible working “Flexible working arrangements including working from home have become the norm in todays technology-rich business environment” (The end of flexible working? Has Yahoo!s Marissa Mayer sounded the death knell for remote working, 2013, p.15). Modern employees like to have more time spent with their families and friends. In other words, work life balancing is a must for modern employees. Majority of the employees like to get flexible working hours. They dislike the idea of working continuously or working on a fixed time schedule just like a machine. Flexible working hours help them to take leaves at times and compensate for such leaves on other occasions. In other words, the employees will be benefitted if the organization allows them to work flexibly. According to U.K employment laws, ‘Employees who care for someone (eg a child or adult) have the legal right to ask for flexible working’ (GOV.U.K., 2013). However, many of the Irish organizations are reluctant in providing flexibility in works to the employees because of the lack of workforce. Many of the employees in Irish workplaces have over workloads. Therefore, flexibility in working is a distant dream for them. It is necessary to provide flexible working hours to the employees in order to help them in completing their personal tasks. Man is a social animal and he has many personal, professional and social commitments. It is necessary to help the employees in fulfilling all his commitments in order to achieve peace in his mind. Only an employee with peaceful mind will contribute to the organization. Moreover, flexible working helps employees to shed the job stress that they acquired from the organization every day. Labor demand and supply forecasting As per the views of the HR manager of Butlers Company, Labor demand and supply forecasting is another major managerial function (See Appendix). It is not necessary that the labor demand remains always stationary. When the demand for Butler chocolates increases, the company has to increase the production. On such occasions, it is necessary to recruit more employees instead of trying to manage the product with the help of the existing employees. Recruitment and retention planning Recruitment and retention are two of the most important and basic HR functions in companies all over the world. It is the duty of the HR managers to identify the right talents and recruit them. Moreover, HR managers are responsible for placing the newly recruited employees in suitable posts. The duties of the HR managers are not finished while posting the employees on suitable posts. It is necessary for the HR managers to make sure that the recruited employees are satisfied and they have no plan to resign from the organization. In other words, retention is as important as recruitment for HR managers. Recruitment helps organizations to ensure that the right person at the right place at the right time. Recruitment is normally taking place internally and externally. According to Anyim, et al. (2011) and Zimmermann (2009) pointed out that the internal recruitment is the most favourite recruitment methods in developed companies whereas in underdeveloped companies, external recruitment methods are prominent. The HR manager of Butler Company seems to be in agreement with the views of Anyim, et al. (2011) and Zimmermann (2009). He also mentioned that internal recruitment is suitable for small companies since it helps small companies to spend less for lengthy external recruitment process and recognize the internal talents with the help of promotions. According to Paul Slezak (2012) internal recruitment helps companies to save time and money, reduce training time, improve productivity, and morale of the employees. Talent management ‘Talent management is the systematic attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an organization, either in view of their ‘high potential’ for the future or because they are fulfilling business/operation-critical roles’ (CIPD, 2013b). Talent management is necessary for organizations to reduce employee turnover rate. If an organization fails to manage the talents properly, employees may think about joining another organization. Bayo-Moriones & Ortín-Ángel (2006), mentioned that internal promotions help companies in the process of talent management. Organizing Change management principles and strategic management principles are necessary for modern organizations to overcome the challenging economic climate prevailing at present. Butlers Company has already merged some of its divisions together to reduce the overhead expenditure and also to deal with the economic problems (See appendix). It is impossible for small organizations to have different departments for executing various tasks and still able to reduce the overhead expenditure. For example, production and planning are two independent departments in most of the modern organizations. When these departments function independently, it is necessary to keep managers and employees at different levels of each of these two departments. On the other hand, if these departments work together, it is possible for a single manager to look after the operations of both the planning and production departments. Even though such an arrangement may increase the workloads of the manager, an organization may be forced to implement such changes in order to overcome the recession problems. Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. It has three different aspects: adapting to change, controlling change, and effecting change. For an organization, change management means defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities (Rouse, 2010) A study conducted by Klarner and Raisch (2013, p.160) among 67 European insurance companies between 1995 and 2004 reveals that companies that change regularly outperform those that change irregularly. When changes take place quite regularly, employees may not show much resistance. However, when changes take place irregularly, employees may develop doubts about the intentions of the management. Basically, employees dislike any change that takes place in an organization. This is because of the belief among the employees that all organizational changes are intended to maximize the profit and to exploit the employees further. Moreover, organizational inertia or the employment inertia forces employees to resist any organizational changes. It is necessary for the managers to overcome all these challenges and help the organization in the implementation of change management principles in order to overcome the difficult economic situations and to increase the competitive power of the organization. Leading Hall et al. (2013), pointed out that the role of a manager in the workplace is leadership. All managers are leaders; however, it is not necessary that all managers are effective leaders. According to Cohen (2000), leadership is a process through which an individual tries to manage, direct and control a group of people towards a goal. Since a group of people may have different interests and behaviours, it is necessary for the manager to formulate suitable strategies to manage or lead all the members in that group. According to the HR manager of Butlers Company, situational leadership is the best managerial approach. In his opinion, it is impossible for a manager to become democratic all the time(See appendix). A manager has to use reward and punishment as strategies to motivate the employees. The allocation of rewards and punishment should be done based on the nature of the employee. For hard working employees, reward is the best motivating factor. But for lazy employees, punishment should be used as a motivating strategy. The XY theory of motivation says that employees are of two types; one who like his work very much and the one who dislike his work. Theory X says that generally human being has an inherent dislike towards work. “Because of this inherent dislike of work, most people must be coerced, controlled, directed, or threatened so as to induce them to put forth enough effort so as to meet their goals and get their work done” (Furst, 2009). Majority of the employees have an inherent dislike towards their profession. According to the HR manager of Butlers Company, punishment is the only way to motivate this type of employees. On the other hand people in Y category believe that work is natural just like play or rest. This type of employees can be motivated with the help of rewards. Self-confidence and self-esteem are necessary for a manager or leader to excel in his profession. A person with lack of self-confidence cannot become an effective manager. According to Perera (2007), self-confidence of a person can be evaluated based on the answers given by him to the questions such as; Is your job worthwhile? Do others respect what you do? Do you believe you are successful; How do you see yourself; How do you feel about your strengths and weaknesses; Are you comparing yourself to others and ignoring the unique value that you have; What do you think of your social status?; How do you relate to others and Can you make your own decisions? The answers of these questions would definitely give an idea about the self-confidence of a person. Leaders should develop enough self confidence in their abilities and strategies before, they try to lead or manage a group of people. In the absence of self-confidence, leaders cannot take brave decisions or effective decisions. The HR manager of Butlers Company follows situational leadership. The core of situational leadership is to take decisions based on the situations. The decisions taken on one occasion may not be suitable for another occasion even if the occasions are similar in nature. Situational theory rejects the idea of standardization in decision making. It allows leaders to take different decisions that are suitable for the benefit of the company as well as for the employees. According to the HR manager of Butler Company, culture plays an important role in shaping leadership. He has pointed out that a number of employees working in his company are foreigners. In his opinion, management of diverse workforce is a difficult task compared to the management of a single cultural workforce since the demands and the interests of the diverse workforce could be contrasting in nature (See appendix). Management styles and leadership styles in different countries may not be the same. The ethical or moral actions in one organization or country need not be the same in another organization or country. The activities of the manager could be perceived differently by the different employees because of their differences perceptions about ethics and morality. The trust from the employees is necessary for a manager or leader to execute his jobs properly. According to the Butler company manager, it is necessary for the leader to keep a sound relationship with the employees all the time to excel in his profession. Controlling Controlling is another important aspect of management. It involves various processes and such as carefully collecting information about a system, process, person, or group of people. ‘Managers set up control systems that consist of four key steps: Establish standards to measure performance; Measure actual performance, Compare performance with the standards, Take corrective actions’ (Cliffs Notes, 2013). Managers are responsible for setting standards to measure performances based on the departments in which the employees are working. They will set organizational goals based on the anticipated performance outcomes of the employees. When the employees fail to perform as anticipated by the manager, organizational goals cannot be achieved. Therefore, managers should set realistic organizational goals after evaluating the performance of the employees. Once the performance standards are determined, the managers should implement systems to measure the performances. The actual performance of the employee should be compared with the set standards of performance in order to determine whether the employee performed better or poor. After this evaluation, the managers should think about the strategies necessary to improve the performances of the underperforming employees. At the same time, it is necessary to honour the performances of hardworking employees in order to motivate them further. In short, motivational strategies such as rewards and punishments should be implemented by the managers to increase the productivity of the employees. Motivation can be classified into two broad categories; intrinsic and extrinsic. According to Areepattamannil et al. (2011, p.428), ‘intrinsically motivated behaviours are those whose motivation is based in the inherent satisfactions of the behaviours per se, rather than in contingencies or reinforcements that are operationally separable from those activities’. Intrinsic motivation is driven by inherent factors. On the other hand, ‘extrinsic motivation, refers to a broad array of behaviours having in common the fact that activities are engaged in not for reasons inherent in them, but for instrumental reasons’ (Vallerand and Ratelle 2002, p. 42). Job satisfaction is an intrinsic motivator whereas higher salary is an extrinsic motivator. Managers should use intrinsic as well as extrinsic motivating strategies judiciously to get the most out of the employees. Work life balancing, ability to take part in decision making, better organizational culture, better corporate image, better work culture and work environment etc are some of the major motivating factors for the employees. Managers should make sure that the employees are motivated in all respects so that the business face any problems from the employee side. References Anyim, F. C.; Ikemefuna, C & Shadare, A. O.  2011. Internal Versus External Staffing in Nigeria: Cost-Benefit Implications. Journal of Management & Strategy. Dec2011, Vol. 2 Issue 4, p35-42. Areepattamannil S, Freeman, J.G & KlingeIntrinsic D.A. 2011. Motivation, extrinsic motivation, and academic achievement among Indian adolescents in Canada and India. Soc Psychol Educ (2011) 14:427–439.DOI 10.1007/s11218-011-9155-1 Bayo-Moriones, A& Ortín-Ángel, P. 2006. Internal Promotion Versus External Recruitment In Industrial Plants In Spain. .Industrial & Labor Relations Review. Apr2006, Vol. 59 Issue 3, p451-470. Butlers Chocolates, 2014. About us. [Online] Available at: http://www.butlerschocolates.com/about-us/ [Accessed 14 August 2014] Cohen W.A. 2000. The New Art Of The Leader Revised, Publisher: Prentice Hall Press (October 3, 2000) Cliffs Notes, 2013. The Organizational Control Process. [Online] Available at: http://www.cliffsnotes.com/more-subjects/principles-of-management/control-the-linking-function/the-organizational-control-process[Accessed 14 August 2014] CIPD. 2012. Workforce planning. [Online] Available at: http://www.cipd.co.uk/hr-resources/factsheets/workforce-planning.aspx [Accessed 14 August 2014] CIPD. 2013a. Succession planning. [Online] Available at: http://www.cipd.co.uk/hr-resources/factsheets/succession-planning.aspx [Accessed 14 August 2014] CIPD. 2013b. Talent management: an overview, [Online] Available at: http://www.cipd.co.uk/hr-resources/factsheets/talent-management-overview.aspx [Accessed 14 August 2014] Furst P. G. 2009. Supervisor’s role in employee performances [Online] Available at: http://www.irmi.com/expert/articles/2009/furst11-construction-risk-management.aspx [Accessed 14 August 2014] GOV.U.K., 2013. Flexible working. [Online] Available at: https://www.gov.uk/flexible-working[Accessed 14 August 2014] Hall, J. Johnson, S. Wysocki, S and Kepner, K. 2013. Transformational Leadership: The Transformation of Managers and Associates [Online] Available at: http://edis.ifas.ufl.edu/hr020[Accessed 14 August 2014] Klarner, P and Raisch, S. 2013. Move to the beat--rhythms of change and firm performance Academy of Management Journal. Feb2013, Vol. 56 Issue 1, p160-184.  Onuoha, B. C. 2013. Wealth Creation, Retirement and Succession Planning of Entrepreneurs in South-East, Nigeria. International Business & Management. 8/31/2013, Vol. 7 Issue 1, p99-105 Perera, K. 2007. What is Self Esteem?. [Online] Available at: http://www.more-selfesteem.com/whatisselfesteem.htm[Accessed 14 August 2014] Rouse, M. 2010. Change management. [Online] Available at: http://searchcio.techtarget.com/definition/change-management [Accessed 14 August 2014] Slezak, P. 2012. Keeping it in-house: 5 reasons why internal recruitment is the best place to start. [Online] Available at: http://recruitloop.com/blog/keeping-it-in-house-5-reasons-why-internal-recruitment-is-the-best-place-to-start/[Accessed 14 August 2014] Vallerand, R. J., & Ratelle, C. F. 2002. Intrinsic and extrinsic motivation: A hierarchical model. Handbook of self-determination research (pp. 37–63). Rochester, NY: University of Rochester Press. Zimmermann, S. 2009. Internal Promotion vs. External Recruiting - an Economic Analysis of Factors Influencing Executive Successor Choice. Zeitschrift für Personalforschung. 2009, Vol. 23 Issue 3, p195-218 Appendix Interview with the HR manager of Butler Company 1. As an HR manager, what are your basic job functions? Planning, leading, organizing and controlling are the four major job functions for me. I have to plan the available labour force in such a manner that all the employees are utilized properly for the benefit of the company. Moreover, I have to make sure that enough workers are available for work in all the departments. I should give instructions to the workers and make sure that the instructions are obeyed or followed. 2. What type of planning are you doing before the beginning of each day’s work? Workforce planning is the major function undertaken by me. It is not necessary that all the employees are present in a particular day. I have to make sure that available workforce has been used effectively so that none of the core business functions have not been interrupted. Recruitment and retention planning, Labor demand and supply forecasting, succession planning; flexible working planning, and talent management are some other planning functions undertaken by me. 3. What are the importance of leading in management? In the absence of a leader, the workforce can be considered as an inactive entity. Leaders are responsible for giving instructions to the subordinates. Moreover, they should make sure that the instructions given to the employees are obeyed. 4. What do you mean by organizing? An organization has many resources such as manpower, material, machinery and money. It is necessary to organize these organizational resources properly to get the maximum out of it. 5. What do you mean by controlling in management? It is not necessary that the employees work strictly in accordance with the instructions given to them. They may violate many of the instructions given. In such cases, it is the duty of the manager to control the employees properly and force them to obey the instructions. 6. What type of management approach you are following? I am following situational leadership approach. It is impossible for a manager to become democratic all the time. A manager has to use reward and punishment as strategies to motivate the employees. Situational leadership help me in this regard. 7. What type of recruitment are you preferring? Internal since it is the cheapest recruitment option available for small companies 8. What are you doing for talent management? We are giving enough opportunities for career development. None of our employees will think about resignation because of lack of career opportunities. 9. What strategies are used by you to deal with the structural change and development? Because of the ongoing recession problems, it is necessary to implement a lot of structural changes in an organization. Change management principles as well as strategic management principles are necessary for modern organizations to overcome the economic challenges. We have already combined some of the divisions together in our organization to reduce expenditure and also to deal with the recession problems. We have already merged the production and planning departments together to reduce the expenditure. 10. What strategies are used by you to motivate the employees? Rewards and punishment. It depends on the nature of the employee. For hard working employees, reward is the best motivating factor. But for lazy employees, punishment should be used as a motivating strategy. Read More