Business Sustainability - David Jones Limited - Case Study Example

Engineering Management Name Institution Lecturer Course Date Engineering Management Table of Contents Table of Contents 2 Introduction to the Organisation 3 Methodology 3 Organisation Assessment against the 14 Principle of Management 6 Sustainability 6 Internalisation 9 Company’s Strengths and Weaknesses 10 Strengths of the Company 10 Reputation 11 Extensive Market Experience 12 Quality Reputation 13 Highly Trained, Skilled, Experience and Motivated Workforce 13 Weaknesses of the Company 14 Concentrated/narrow Market 14 Suggestion of how the Organisation Could Improve its Management Principles, Practices and Performance 14 Main Challenges Faced in Producing the Requirements and I Overcame Them 15 Lessons I learned in the Process 16 References 19 Introduction to the Organisation The organisation we used for this assignment is David Jones Limited, a department store that trades as David Jones and which was founded in 1838 making it among the few oldest companies in the world. The company’s headquarters are located in Castlereagh St, Sydney. David Jones is well known as the oldest department store in Australia having been in operation for almost two centuries. Additionally, it is well known as the department store worldwide that has retained its original name (David Jones Archives, 2012). Over the years, David Jones has expanded its operation throughout Australia and currently, the company is operating 39 stores that are distributed across Australia in most states of Australia. The company has managed to expand its business operations through opening up of new stores and acquisition of existing stores such as the acquisition of Scott’s department store in 2011 (The City of Newcastle, n.d). The company’s product portfolio comprises of children’s, men’s and women cloth products, shoes, women fashion products, beauty products, travel goods, stationery, electrical, electronics, decorating and furniture products among others. Methodology Having identified the organisation to use for this assignment, the next step involved the identification of key people in the organisation who could give us information about the organisation as per the requirements of the assignment. We knew some store operators but they indicated that they did not have much information about the company. As such, we had to identify a person working at the organisation’s headquarters. Contact details for the CEO and chairperson were readily available but we realised that it could be too difficult to interview these people. We went to the company’s headquarters and at the reception, we asked the receptionist if we could talk to a senior person in the organisation and we were directed to a person who could give us some information about the company. Upon meeting him, he agreed to share some of the information with us on condition that we did not disclose the person who gave use the information and that we did not use the information for other purposes other than this assignment. We booked a meeting with him for the Monday that followed, which would last for 2 hours between 2:00PM and 4:00PM. As such, the name of the person and his position in the company will remain anonymous as per our agreement with him as well as to satisfy the ethical aspect of the interview. After this, we prepared a structured interview and appointed two people to conduct the interview. One person was supposed to hold discussion with the person taking notes. This was meant to ensure that we took all the important details from the discussion for use in preparing the final report. Before the interview day, the person who was to conduct the interview practiced through interview tests with the rest of team members who made various improvement suggestions including dressing code, opening up the discussion, eye contact, relevance of questions, when to know that the interviewee has provided sufficient information about a question, time management and use of visual communication. Everything went on well and we obtained all the information we required to write the report and fulfill the requirements of the assignment. We then left the contact person with a questionnaire that we asked to fill. The questionnaire asked the contact person to rate his company’s performance on the 14 principles of management as shown in table 1 below. Before leaving, the interviewer asked the contact person to go through the questionnaire briefly and identify if there was anything that he required further explanation. Fortunately, the contact person understood all the 14 principles and he agreed to fill the questionnaire and have one of us collect it the following day. Name: Mark Twain Contact Details (Email and Tel): Position: Supply Chain Manager Company: David Jones Limited For each statement, please circle the number, which most closely represents the extent to which this principle currently describes your company. Not at all To a weak extent To a moderate extent To a large extent To a very large extent Principle 1: Alignment Our business has aligned employee behaviours with stated company values and direction. 1 2 3 4 5 Principle 2: Distributed Leadership In our business, individuals and work teams are assigned, and accept, responsibility for operational decision making and performance improvement. 1 2 3 4 5 Principle 3: Integration of Effort Our business is not a functional/ hierarchical organisation but a value creation/process focused organisation. 1 2 3 4 5 Principle 4: ‘Out-Front’ Our business takes a lead in determining industry standards and practices. 1 2 3 4 5 Principle 5: ‘Up-Front’ We apply high standards of integrity and openness in everything we do. 1 2 3 4 5 Principle 6: Resourcing the Medium Term Our business is able to effectively balance short-term and medium term issues and requirements. 1 2 3 4 5 Principle 7: Time Based Time is a critical organisational value in our business. 1 2 3 4 5 Principle 8: Bias for Action Our business is good at implementing ideas and strategies. 1 2 3 4 5 Principle 9: Learning Focus Everyone in our business is involved in a learning/development program. 1 2 3 4 5 Principle 10: Discipline We invest in policies, procedures and standards and apply a strong systems perspective in our business. 1 2 3 4 5 Principle 11: Measurement/Reporting and Publication Our business measures and reports to our employees, the financial and non-financial performance information needed to excel. 1 2 3 4 5 Principle 12: Customer Value In our business, all employees strive to enhance customer value creation. 1 2 3 4 5 Principle 13: Capabilities Creation Business and organisational capabilities are defined as priority areas for development and investment. 1 2 3 4 5 Principle 14: Micro to Macro Our employees know how their individual efforts contribute to business success. 1 2 3 4 5 Organisation Assessment against the 14 Principle of Management The results of the survey shows that the organisation is performing highly on all the 14 principles of management since the contact person ranked all of them the highest possible rank, number seven. It seems, therefore, that the organisation has a high performing management that understands its tasks pretty well and which has enabled the organisation to not only survive numerous market challenges for almost two centuries, but has also enabled the organisation to compete well in the market. However, we cannot draw valid conclusion based on this survey considering that only one person was interviewed. In order to get a clear picture of the organisation’s management, it would be better to have more senior contact people from the organisation to fill the questionnaire so that a better analysis is done. Sustainability The term sustainability is associated with longevity and nourishment. Jacobsen defines business sustainability as “building long-term consequences into processes by managing a business in such a way that processes or the overall state of organisational-dependent resources can be maintained over an indefinite time horizon” (2011, p. 9). Sustainability is in the heart of practically any business organisation and David Jones Limited is not an exemption. In the interview, the contact person indicated that the vision of the organisation is grounded on the concept of sustainability and corporate social responsibility, two business concepts that often go hand-in-hand. The contact person provided the organisation’s sustainability definition, which has been used to establish strategic goals regarding sustainability. According to the contact person, David Jones Limited defines sustainability on the basis of three concepts, which include economic sustainability, social sustainability and environmental sustainability. These three areas of sustainability guide the organisation’s decision-making process in that when the management is making key decisions, they not only consider financial returns of the decision but also environmental and social impact of the decision. The goal of the process is to ensure that the organisation’s operations do not deny the future generation to live a fulfilling life. The sustainability strategy that David Jones Limited uses is grounded on the triple-bottom-line (TBL) theory of sustainability. The TBL theory argues that business sustainability is like a three-legged stool and these legs include economic sustainability, social sustainability and environmental sustainability as shown in figure 1 (Elkington, 2013). Figure 1: Graphical representation of the TBL theory. As figure 1 shows, an organisation is said to have achieved business sustainability if it satisfies the three elements of business sustainability. Environmental and social sustainability elements, according to the contact person, comprise the corporate social responsibility (CSR) of the organisation. The goal of the organisation’s CSR is to ensure that it leaves the place better than it found by designing its operations in a way that has little, if any, harm to the environment and social wellbeing of the society. As such, the organisation is highly concerned about sustainability especially CSR and its sustainability reporting framework is based on the TBL theory. Every year, the company prepares CSR reports that show how the operations of the organisation have affected (positively and negatively) the environment and social well being of the society, identified gaps and challenges faced alongside setting new targets and establishing strategies to achieve set targets. This is an indication of the organisation consideration of sustainability as critically important to ensure market survival and give it a competitive advantage over its rivals. David Jones Limited also requires its suppliers to abide by its responsibility requirements especially social and environment sustainability. According to the contact person, the organisation has sustainability requirements that its suppliers must meet for them to sign a supply contract with the organisation. The organisation’s management does this to ensure that its supply chain is sustainable. Issues of key consideration is ensuring that manufacturers provide good working environments for their employees, there is no discrimination, manufactures do not use forced or underage labor and that suppliers compensate their employees fairly using country and industry requirements of employee compensation. In the effort to ensure that the entire supply chain is sustainable, the organisation, according to the contact person, can terminate contract with any supplier found to engage in unethical business practices. Internalisation In business, internalisation mostly applies to multinational corporations, which are defined as corporations operating in more than one country. Internalisation is the practice of executing transactions such as Research and Development (R&D) and product manufacture within an organisation instead of relying on an outside market such as through outsourcing the production process (Buckley and Casson, 2009). An example of internalisation is use of direct investment as an entry strategy into a new market (foreign country) and an alternative to this is franchising whereby the parent organisation licenses another organisation in the target market the knowledge to do the production and sell in the market. During the interview, we explained the concept to the contact person to ensure that he understood it and thus gave a valid answer. The contact person indicated that the organisation is not concerned about internalisation of knowledge or process since it is not a multinational firm. Its operations are concentrated with Australia. Secondly, this is not a manufacturing or processing company and hence it does not carry out production processes. Accordingly, the contact person indicated that internalisation is not a key issue for consideration. Nevertheless, the concept of internalisation occurs in some manner since the organisation prefers opening up a new store in a new location or acquiring an existing departmental store instead of licensing business people to operate under its name. However, this expansion strategy that the organisation uses is only meant to allow it streamline its business activities and processes through close monitoring of various issues including the quality of products they sell. Company’s Strengths and Weaknesses The identification of the company’s strengths and weaknesses is important in determining the competitive advantage of the company under consideration. Every company has its unique strengths. If the company comes up with strategic approaches for utilising its strengths, this could to lead to immense success in the market alongside the acquisition and maintenance of competitive advantage. Every company has its unique weaknesses that hinder it from realising its full potential. The goal is to come up with strategic approaches towards addressing these weaknesses so that the company can realise its full potential and hence enhance its market performance. Strengths of the Company During the interview, the contact person highlighted and explained a number of strengths of the company as follows: Reputation The contact person was not sure whether the decision to maintain the original trade name and consequent reputation as the oldest departmental store worldwide to maintain its original trade name was planned or was just coincidental. Whichever the case, the contact person believes that this is a major strength for the company since it has worked towards marketing the company’s brand name and image. Secondly, being considered as the oldest operating departmental store in Australia has worked greatly towards marketing the company’s brand name and image. When people search the internet for the oldest departmental store, the name David Jones Limited comes up. “The intent if marketing is to ensure that the brand message reaches to as many people as possible so that even if only a small fractions turns up to buy, the baseline is that you have acquired a new customer. This way, the customer base grows. The next headache for every marketer then is to retain the customer for the longest time possible; in fact, retain the customer for the rest of his or her life. The end result is gradual growth of the market base that results from opening up entry points and closing the exit point. It’s pretty much like a balloon; so long as there are no holes to let air out, air that comes in will stay there for the longest time possible so long as the balloon stays intact. If we conceptualise people to be the air, the organisation to be the balloon and balloon owner to be the management, I am pretty sure you understand how the concept works” said the contact person. “Although this strategy might not attract as many people as other well outlined strategies, the baseline is that it has helped the company to get one more customer.” If the customer finds that we are interesting in that we offer high quality products, next time he comes shopping he will come along with a friend and in so doing we gain an additional customer. It’s the growth magic, you may call it.” Said the contact person. From this discussion, we can conclude that the company has entered the history books of record as being the oldest department store in Australia as well as the world’s oldest departmental store that has retained its original trading name. The implication of this reputation is that the name will mostly feature in several published articles especially business-related articles. As such, several readers will come across the name, some of whom will be Australians. Eventually the company will be enjoying free advertisement. Extensive Market Experience According to the contact person, David Jones Limited has been operation for almost two centuries. This means that the company has built its market survival skills over time and it is now better placed to survive the highly competitive market environment than a new market entrant does. On this issue, the contact person posed the following two questions: “why do you think companies will be ready to hire an expensive yet experience marketer than a recently graduated marketer who will be ready to accept just a fraction of the salary that the experienced marketer will demand? Suppose flu attacks your family, whom between you and your 4 months daughter, son or sibling do you think will fall sick faster than the other.” With an experience of almost two centuries in the Australian retail market, David Jones Limited is well prepared to deal with any market uncertainty. Over this time, the organisation has learned numerous lessons and has established, reviewed and re-reviewed numerous strategic plans to deal with market risks. When combined, these give the company competitive advantage over its market rivals. Of course, there is a plethora of department stores that were opened alongside David Jones Limited but all these have exited the market leaving David Jones Limited operating. David Jones Limited was not immune to things that caused the exit of these retailers but managed to sail through the storm, which has with time made the company better placed to deal with market uncertainties. Quality Reputation According to the contact person, “David Jones Limited is synonymous with quality.” The organisation has a special focus on the quality of the products their give alongside how they deliver these products to customers. To ensure that customers get high quality products, the organisation sources its merchandise from prominent suppliers who have a reputation of providing high quality supplies. The organisation also has quality measurement tools and quality metrics that products must achieve before they can be accepted and consequently placed on the shelves for sale. This has given the company quality reputation that has sustained the company in the highly competitive market for such long. Highly Trained, Skilled, Experience and Motivated Workforce The human resource is a crucial organisational resource that fundamentally determines the company’s success, performance and competitive advantage. In the modern business environment characterised by ever intensifying market competition, the major headache for human resource departments and professionals is how to achieve a highly performing workforce characterised by high levels of skills, experience, motivation and low levels of employee turnover. For instance, the contact person indicated that he has worked for the organisation for the last 15 years. He also indicated that there are several people he met there, who are still working for the organisation. According to the contact person, David Jones Limited can boast to have such a high performing team. Employees consider the company as the best place to work. Employees are highly motivated, which has resulted to low employee turnover rates. The organisation also has highly skilled employees because it attracts highly skilled employees and subjects them to further training to enhance their skills. Almost every employee in the organisation, according to the contact person, is multi-skilled in that he or she can handle two different tasks of roles effectively. Weaknesses of the Company Through the interview with the contact person, the following weaknesses Concentrated/narrow Market David Jones Limited has concentrated its market to Australia only. All its stores are located within Australia only. The operating strategy that the company has adopted puts the company at risk since any major economic turbulence affecting Australia will have a grave impact on the company’s survival. Although the company has operated for almost two centuries using this strategy, any unforeseeable event might cut short the long journey that the company has so far travelled. Suggestion of how the Organisation Could Improve its Management Principles, Practices and Performance Analysis shows that the organisation is performing well on management principles and practices. Its market performance is also recommendable. However, the organisation still has some opportunities that it can exploit to enhance its performance and competitive advantage. The organisation is already well established in the Australian retail market having established a strong footing in the market. It is the highest time the organisation seeks growth outside Australia. With its reputation as a seller of high quality products and one of the oldest departmental stores worldwide, the company can open stores in other countries. The company should target upcoming countries such as China in Asia and Kenya in Africa for business expansion. Through critical country analysis, David Jones Limited will identify countries where it can start new outlets or merge with existing retailers to increase its revenues. Main Challenges Faced in Producing the Requirements and I Overcame Them In the attempt to produce the requirements of the assignment, some challenges were faced. Firstly, it was getting a suitable contact person was a long journey that was disappointing at times especially at one point when we were informed that the organisation does not allow interviews from media people. We were also turned away by the gatekeeper who informed us that the company does not allow visitors without appointments. Luckily, we had a friend working for the organisation and one of us pretended that he was his visitor. The student negotiated for the team and made an arrangement with the contact person. It was difficult to convince the contact person to be interviewed since he believed that were media people pretending to be students despite us having produced our school Identification Cards. However, we overcame this challenge by insisting that were students and that we could bring any other documentation required. Eventually, the contact person agreed to assist us on the ground that he remained anonymous. Another challenge is that the contact person did not understand a number of concepts and issues that were part of the assignment. For example, the contact person did not have an idea of internalisation. However, the person conducting the interview explained every concept to ensure that the contact person understood it so that he could provide valid answers. Although the process took a lot of time, we eventually managed to get answers to all the questions we had structured to fulfill the requirement of the assignment. The third challenge was lack of interview skills required to conduct interview with such a high-level person in the organisation. We had limited experience in conducting interviews and we feared this task. However, through practice, the interviewer managed to improve his interviewing capability especially communication skills. The interview, with the help of other team members, practiced key aspects of communication skills such as active listening and eye contact. Eventually, the interview process was successfully conducted and we managed to get all the information we wanted. The fourth challenge is that the contact person did not allow us to use right equipment to facilitated information gathering. Since this was an interview, we required a voice recorder to record what the contact person said so that we could transcribe it. We could use a mobile phone with a voice recorder but the contact person did not want to be disclosed in any way. As such, he requested us not to capture his voice since if the audio script found its way to the executive management, it would be troublesome for him. Since we had vowed not to disclose the details of the contact person, we had to honor this request. It was therefore challenging to conduct the interview and at the same time take notes. However, we requested the contact person to allow the interviewer to be accompanied by an assistant who would be taking notes. The contact person granted us the permission, which made it easy for use to conduct the interview and take notes. Lessons I learned in the Process The assignment has taught me great lessons that I will apply in future in my personal life and my career. The first lesson is that having a clearly stated mission and purpose gives the business a direction, which ensures that all activities are aligned towards a given direction. It appears that David Jones Limited purposes to live to entirety and maintain that reputation of being the oldest department store in Australia. This purpose has given everybody the direction such that everything that managers and employees do is alighted towards this direction. This might appear as a simple and meaningless purpose but once broken down, one can see the sense in it. For instance, the company can only live to entirety if it attains and achieve competitive advantage that improves its market survival rates. This in turn calls for the implementation of competitive advantage strategies such as high quality focus. This is a great lesson that I have learned. In life, I need to have a simple purpose when stated but when given a critical analysis provides a deeper meaning. For example, I as a student, I may have the focus of becoming the first in class. This will seem to be a simple purpose statement but achieving it means a lot since I have to come up with strategic ways of achieving the purpose. For example, I definitely have to score A in every unit and to do so, I have to attend all classes, do all the assignments, do more research in the library and extend my study time to ensure that I revise sufficiently before continuous assessment tests and final exams. Another lesson I have learned is that for any business to be successful in the respective market, it must work harder and aim higher than all the other market rivals work and aim. The same applies to one’s individual life in that for one to consider himself or herself successful, he must work harder and aim higher than anyone else. As such, it is always good to compete with main rivals in the market. This therefore calls for competitor analysis to identify main rivals and then analyse their competitive strategies. This way, one can establish competitive strategies that will make the business outshine others. This is the game of competition. Thirdly, I learned how to do business analysis, which I will apply as a future manager. In this assignment, there was a section requiring conducting business analysis to identify the strengths and weaknesses of the organisation. This section enabled me to learn how to conduct business analysis that I will apply during the remaining part of my education and in future as a business owner or a manager. Finally, I learned how to conduct interviews and collect primary data. The assignment was based on an interview with a key contact person in an organisation and this gave me an opportunity to conduct an interview. I have learned that conducting an interview is not only about asking questions of interest; it requires more than that. Conducting interview requires the combination of a set of skills including presentation skills, communication skills, negotiation skills and interpersonal skills just to mention a few. The way a person is dressed plays a crucial role in determining first impression of the interviewee or potential interviewees. This may in turn affect the responses that one gets. To be successful in conducting an interview, one has to be professionally dressed especially if one is interviewing high profile people such as managers and business people. References Buckley, P. J. & Casson, M. C. (2009). The internalisation theory of the multinational enterprise: a review of the progress of a research agenda after 30 years. Journal of International Business Studies, 40, 1563-1580. David Jones Archives (February 19, 2012). Story of David Jones. Retrieved from http://web.archive.org/web/20080415055105/http://www.davidjones.com.au/about/story_of_djs.jsp Elkington, J. (2013). Enter the Triple Bottom Line. In A. Henriques & J. Richardson (Eds.). The Triple Bottom Line: Does it all Add Up? (pp. 1-16). Earthscan. Jacobsen, J. (2011). Sustainable Business & Industry: Designing and Operating for Social and Environmental Responsibility. Milwaukee: American Society for Quality Press. The City of New Castle (n.d). Newcastle by Design: A Self Guide Working Tour. Retrieved from www.newcastle.nsw.gov.au/__data/assets/pdf_file/0020/17507/heritagewalkfurtherinfo.pdf Read More