Management Concept in Contemporary Environment - Case Study Example

Management Concept in Contemporary Environment (Coles) Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction One sure way to make to have the organization compete favorably in the current business environment and create value for the company shareholders, is to employ the most appropriate management approach which is focused and issue based. This can be inform of the strategy that the business employees. In the current world of business, competition has come into play with the emergency of globalization. More than ever before, businesses are faced with both opportunities and challenges that must be exploited and managed. Technology is also influencing the world market the same way (Schermerhorn et al 2011). This is because individuals can access information at any given time on a certain change and therefore engage a more suitable management approach in each and every situation. Further, with the existence of technology, the way businesses are interacting with the customers has changed and now numerous transactions can be done online without necessary having the involved parties have any physical contact (Ackoff et al 2010). In addition, change in customer demands, is also one other factor that is influencing the management styles in the contemporary business environment. Many of those organizations that have failed to learn about these trends in the market, have had very time in realizing their goals and consequently decline in their level of performance or even collapse. One such company that has had the same experience in the recent past is Coles Retailer of Australia. Before the purchase of the company by Wesfarmers in 2007, the company was doing badly in terms of performance for over fifteen years. However, once put under new management, the business has managed to recover and creating value for its shareholders. It’s from this ground that this assessment is seeking to answer the relevance of management and its different concepts in the contemporary environment and this is in reference to Coles. Identified management concepts Coles Retailer that was founded in 1914 by George James in the Melbourne suburbs of Collinwood has had its fair share of challenges and opportunities. Since then, Coles has grown to reach an extent where it is now serving over 2 million customers who come into the company premises in each single. On the same line, the staff base has also increased as management issues have also continued to double calling for focused and strategic approach to have the company remain competitive in the market. As the company continued to grow, have also complications in management have come to be very critical. Prior to 2007 purchase by Wesfarmers, the retailer had experienced very difficult times for over 15 years in its performance. During the purchase by Wesfarmers, a new management team was picked led by Ian McLeod as the CEO (Wesfarmers Limited 2009). The objective of this move was to give the company a new approach to management and help it revive its glory. Since then, the company has managed to rejuvenate given different management or rather concepts that have been applied by the new management. Among the management concepts that have come out clearly at Coles include improvement in communication, remuneration and benefits, organizational structure, customer focus, technology and motivation. Customer focus Customer focus is a management technique that is used in identifying different customers, the products and services to be delivered, the quality features of the products and the performance measures that necessary for the business. In management, the customer experience has a big drive on what the business should offer and its prospects in terms of revenue and market growth. Even though, there is a perception that delivering a great service will add to its cost, the customer demands, still will have to shape its strategies (Ackoff et al 2010). By being customer focus, then it means that the business is able to understand what the market wants in terms of quality, price and convenience. In general, when the business chooses to be customer focused, there is a likelihood that the business will be able to deliver the most appealing products and services which will attract and retain certain market segment. In the case of Coles, this aspect applies where the company used to focus more sales more than any other thing. All the weekly meetings that were held before the new management came into being the agenda was all about the amount of sales was made without giving any strategy view on how the business could be improved either by diversifying and providing fresh and quality products or by extending the markets (Greenblat & Hawthorne 2011). This could greatly harm the business, because sales would grow without a major initiative by the business to know what the markets wants and the best way to deliver. It is with this regard that it was identified by the retailer’s new management under the leadership of Ian Macleod, chose to put customers top of priorities from day one. This led to development of a market plan, commonly known as “circle for success” which comprised of six goals and that are all very significant to the business and which included better value, quality fresh food, smarter stores, better service and excellent on-shelf availability as well as superior customer experience. The six goals were founded on 10 cross-functional programs which are important in realizing organizational goals objectives and they include buying, store operations and support, customer service, value, exclusive brands, distribution, store networking and marketing. All these was done purposely to get it right in delivering the customers with the most appropriate and quality products at the most convenient for the purpose of creating impact in the market (Speedy 2011). The implication of this concept to Coles is that, the company must realize it is operating at a time when customers have a very significant stake in the determining how the company will be able to sustain itself from the purchases they make and therefore introduce most suitable programs to serve their demands. Employee management and retention Employee management and retention is an important concept in management and it entails the process of making sure that all interests employees have are listened and attended to. This is an important concept in management today since it helps the business assure employees of their job security. With employee management, it is expected that different interest the employees including pay, work conditions and job description are taken into account so as to ensure that rightful efforts are recognized (Schermerhorn et al 2011). This concept can directly be applied to the case of Coles as one way of making sure that employees are loyalty and engagement to the company are won. This for example can be established by the move by the new director of stores, Stuart Machin who set out the program to improve on the way the staff perceived the company something that he went further to enact by making 80% of the casuals that were working in the stores to be on be on permanent terms. This is quite different from the previous regime where 70% of the employees in the stores were on working on casual basis. This approach to management has greatly helped the business in dealing with issue of consistency in the workforce and also increased greatly the chances of managing employee absenteeism and employee turnover (Wesfarmers 2012). The implication of this to the business is that the same practice should be duplicated in all functions to ensure that each and every employee is treated with respect and his contribution to the business highly appreciated. Remuneration and benefits Remuneration and benefits refers to what the employers pays its workers for the effort put into business in delivering on its outcomes. In a managerial context, remuneration and benefits is a very critical management issue. This is because it can be used to determine if they will be satisfied and committed to working in the company. It is expected that with proper use of remuneration and benefits must clearly reflect one’s input into the overall performance of an organization. Job satisfaction is the biggest force behind employee remuneration and benefits management (Ackoff et al 2010). This is after research has shown that there are higher chances of a person who is well paid to be happier and satisfied in his work. Job satisfaction can directly be related to individual performance although this can also be influenced by job enlargement, rotation and enrichment. Some of the remuneration and benefits packages that can lead to job satisfaction and consequently enhanced organizational performance include pay, promotion, and benefits as well as work conditions and the work itself (Burrow 2007). At Coles, the aspect of remuneration and benefits is learnt from the way the company used to remunerate its employees and more especially the managers before and after the purchase by Wesfarmers. First, the management board before purchase in 2007, was used to an approach that for the business to attract the most talented and skilled as well as committed retailers, providing high levels of remuneration was the best way forward. However, despite paying heavy incentives, the company could not improve its performance (Coles 2012). This could later see the new management recognize the need to restructure the remuneration package and the leadership of Ian McLeod so as to ensure that pay was related to performance with the use of more challenging targets. With this regard therefore, the implication of this management concept to Coles is that the business must develop a comprehensive remuneration package that takes into account both the interests of company and the employees. Organizational structure An organizational structure can be termed as a framework which shows how a given team is organized and more especially at workplace with the objective of bringing together all the members to work for a common objective even though on different capacities. In management situation, an organizational structure is very fundamental. This is because, first, it seeks to give the members a clear guideline which should followed when carrying out various functions. This is to say that a well developed structure is used to ensure orderliness and manage any disagreements at workplace (Schermerhorn et al 2011). However, important to note is that an organizational structure can never be without a proper organizational design. Organizational design according to Anderson (1988) is a series of decisions that are aimed at aligning organizational goals and purpose, tasks, structure, informal organization, reward systems and people who are expected to do the work. The ultimate objective of organizational design and structure in a management environment is to bring about harmonization of various factors of production for improved performance. At Coles like is the case of many other companies, an organizational structure, is expected to play a central role in its performance (Griffin 2010). As can be learnt from the company scenario, it can be very well argued that the company has real grown and its management has become very complex. Currently, the company is serving over 2 million customers each week. At the same time, the company has a workforce of over 105,000 workforce, 740 store managers and 16 regional managers, 16 general managers alongside 750 geographical locations. It is because of this kind of arrangement and company size the new management team is taking the responsibility to readjust its structure so as to have a more clearer and manageable structure where each and every person’s contribution can be noted and given credit if deserving (Condon 2012). This concept at Coles, implies that a more flexible and lean structure is required to facilitate decision making in important matters affecting the company. Technology management Technology management is a very famous concept in the contemporary business environment and it entails the use of the modern means of communication and in particular the internet and other software to facilitate different business programs. Technology in the world of business today has come to play a very significant role in cutting down the operational costs among various businesses and also improving on the way services are delivered to the customers. With technology, it is very important to realize that the business can easily expand its business territories given the fact that the customer can make direct contact with the business irrespective of the distance between (Schermerhorn et al 2011). Further, with technology, the business can easily facilitate coordination of its internal operations and activities. This is especially important in ensuring that all business functions are working as one family towards a common goal through the process of sharing important information like stock management and control alongside operations and marketing. At Coles, the concept of technology and its management is likely to play a central role in improving its performance. This can be learnt from the plan by the new management to introduce internal automated systems with the aim of improving the quality of its fresh food that is delivered to the market and a system to facilitate link between the company warehouses and its suppliers so as to ensure that at all times good stock levels are maintained. For instance since the automation of the company systems, some positive outcomes have started to emerge and this can be seen from control of stock at minimum manageable levels, sales from fresh food have also continued to increase reaching about $1.4 billion for the last three years. Waste from breakages and food spoils have also been reduced. In general, it is now evident that Coles is greatly depended on new technology to support its operations (Coles 2012). The implication of this concept to Coles is that the new management must always strive to update its technology so as to have the latest technology ads that can add value to its operations at all times. Improvement in communication Communication entails the process of interacting between two or more parties with the main purpose of delivering information on a given issue. This is one important concept that any management cannot do without. This is because it plays a very significant role in ensuring that important information is flowing in all areas of the business both internally and externally (Ackoff et al 2010). Communication is especially important in aiding the process of communicating organizational goals and objectives and the roles and duties of each function in the final outcome. Further, it is expected that because an organization is a creation that comprises different stakeholders including employees, owners, suppliers and the customers, well developed communication systems can play a very significant role to have each party informed of what going on in the business and also help address the concerns raised by each stakeholder. In the case of Coles, communicates improvement is very vital and this can be learnt from the situation where the company is not able to learn from the suppliers on the difficulties they are experiencing in doing business with the company. This is after it emerged that despite the role the suppliers and customers were playing in the company, they were neglected at the benefit of investors. For instance, there was some concerns that while the business was paying handsome bonuses to investors, the suppliers were being squeezed what they received as payment for their supplies (Productivity Commission 2011). The whole problem was founded on poor communication which hindered effective communication between the suppliers, customers and the company management team. The implication of this concept to the company therefore, is to develop a communication structure which supports free flow of information in and out of the business. Conclusion This assessment has gone through the case of Coles Retailer which is an Australian company and established different management concepts that could be very relevant to the case and that have been applied by the new management to help the company recover its former position in terms of performance. The management concepts that have been identified include Improvement in communication, remuneration and benefits, Organizational structure, customer focus, Technology management, employee management and retention. In general, it can be concluded that with the changing business environment, organizations more than ever, are obliged to follow suite by employing management approaches that will keep them at pace. References Ackoff, R. L., Addison H. J. and Gharajedaghi J. (2010). Systems Thinking for Curious Managers: With 40 New Management f-Laws. Triarchy Press Ltd. Burrow, V. (July 3, 2007). A $22bn wins, but does it stack up? The Age. 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Economic structure and performance of the Australian retail industry. Canberra, Australia: Productivity Commission. Retrieved December 20th, 2012, from http://www.pc.gov.au/__data/assets/pdf_file/0019/113761/retail- industry.pdf Schermerhorn, J.R., Davidson, P., Poole, D., Simon, A., Woods, P. and Ling Chau, S. (2011) Management: Foundations and Applications Wiley 1st ed. 2011 Speedy, B. (2011), February 01). Coles strengthens sales growth against arch-rival Woolies. The Australian. Retrieved December 20th, 2012, from http://www.theaustralian.com.au/business/coles-strengthens-sales-growth-against-arch- rival-woolies/story-e6frg8zx-1225997695760 Wesfarmers Limited. (2009). Wesfarmers. In Coles Sustainability Report 2009. Retrieved December 20, 2012 from http://www.corporate- ir.net/Media_Files/IROL/14/144042/WES09-xxx%20Sustainability%20Report.pdf Wesfarmers. (2012). Wesfarmers Annual Report 2012. Retrieved December 20th, 2012, from Wesfarmers: http://thomson.mobular.net/thomson/7/3319/4677/ Read More