1. A major adult alcoholic-beverage marketer is considering introducing an “adult” soft drink that would be a socially acceptable substitute for alcohol.
What cultural factors could influence the introduction decision and subsequent marketing mix?
2. A person will tend to buy the brand in the product class whose image is most congruent with his or her self-image. Is a person’s self-image a highly reliable predictor of his or her brand choice? Why or why not?
3. Describe the consumer market for briefcases, using the “Seven Os”
framework described in chapter 4.
SAMPLE ANSWER
Marketing Management
Marketing is one of the critical strategies that business employ to position their products in the markets. The paper deliberates on the cultural factors that may influence the introduction decision and subsequent marketing mix when introducing this adult soft drink. It as well evaluates whether personal self-image is a predictor of his or her brand choice and consumer market briefcases.
Cultural factors require consideration when introducing any products. Culture explains the lifestyles of people and therefore determines the kinds of product choices they make. In this case, it is imperative that cultural factors are considered. Some of the cultural related factors the company will consider include the culture and subculture of the target audience. The company must consider the religious affiliation of the target group, their race, geographical locations and their nationality. Other factors will include the language of the target audience, the beliefs and values, the norms, the consumption habits of the target audience and the interest and preferences. For instance, the beliefs and values of the target audience will help the company to understand whether the target audience can change from consuming alchol or locally brewed beer to the soft drink. Language will also be essential, as it will help the company to use a language and messages that resonates with the target audience to woo them to purchasing the product. The language should as well enhance understanding between the company and the target audience. Interests and preferences, norms and consumption behaviors as well vary from one community to another and this will help the company to consider their prices, packages and the promotional strategies that will help to attract more customers in the market segment.
Person’s self-image is a highly reliable predictor of his or her brand choice. People associate and make decisions to purchase certain categories of products that they resonate with their personal self-image (Ivens & Valta, 2012). This explains why companies design certain class of products to specific category of consumers.
Consumer markets involve individuals that buy goods and services for personal consumption. Understanding these markets is essential to ensure achievement of marketing objectives. Marketers should understand the 7 O’s of marketplace which include; understanding the target audience in the market, the goods that the people purchase and the reasons or motives why these people purchase these products. Other aspects that require consideration in these market briefs is understanding of the entities that participate purchasing of the products, the processes in the market, the seasons or periods that the goods or people purchase these products and the sources of the markets. These aspects are essential in any consumer market briefs as they allow utilization of appropriate strategies to trigger increase sale.
Innovation Management in MTN and Safaricom Order Instructions: You are required to compare and contrast the innovation management of two organisations in the same sector but with headquarters in different countries e.g. Toyota and Tata Motors.
Innovation Management in MTN and Safaricom
You need to compare some of the key aspects of the innovation management of each organisation by utilising appropriate models and frameworks (e.g. Tidd and Bessant’s (2013) 4 step innovation process). You should then go on to establish what the respective organisations can learn from one another in terms of innovation management.
Recommendations to improve Innovation Management in MTN and Safaricom
Finally, you are expected to provide recommendations to improve the innovation management in each of the businesses.
1. Individual work
2. Primary and Secondary Research
You may find the required information on the organisation via primary (i.e. contact someone in each business at a management level) or secondary/desk (i.e. web, journal articles) research. English language sources are preferable, non-English sources are acceptable as long as a translation of the reference is provided.
3. Writing the Report
Write up your work in a report format. Your report should explicitly include all the items listed in the marking schedule. It should be a minimum of 4,000 to adequately answer the question and a maximum 4,500words in length (excluding references, appendices etc). Please include the word count on the title page; work that exceeds the word limit will be capped per University regulations.
4. Referencing
It is essential that you provide appropriate referencing to avoid both the impression of plagiarism or that you are fabricating work.
Innovation Management in MTN and Safaricom Introduction
• Introduce the two organisations
• Identify some of their main innovative end results.
Analysis
• Compare and contrast the innovation management of the two organisations from your first report.
Utilise appropriate models and frameworks from class material (e.g.
episodes from Tidd and Bessant’s innovation process model and
contextual elements).
• On the basis of your analysis, establish what the respective businesses can learn from one another in terms of innovation
management.
• Provide recommendations to improve the innovation management
in each of the businesses.
Innovation Management in MTN and Safaricom Report conclusions
• Briefly summarize the report’s main points
Presentation
• Easy to follow
• Contents page, page numbers, subsection; easy to read- font, spacing, header/footer (matric. number(s), date)
• 4,500 words – strictly enforced
References
• Appropriate use (‘intext’ a must!)
• Consistent style
SAMPLE ANSWER
Contents
Abstract 3
Introduction. 4
MTN.. 4
Safaricom.. 6
Safaricom’s Case. 8
Top management (or its subset) as a group. 11
Cross-functional, high-level steering group. 12
MTN’S Case. 13
Chief research officer (CRO) or Chief technology officer (CTO) as the ultimate champion of innovation 13
The dedicated innovation manager. 15
How Safaricom and MTN compare and contrast in terms of innovation management 16
What can the two companies learn from each other?. 17
Recommendations. 18
References. 19
INNOVATION MANAGEMENT IN MTN AND SAFARICOM
Abstract
Innovation management basically entails effectively capturing and managing innovation within an organization. This concept is imperative in bringing together social software and collaboration with the aim of achieving optimal results in any organization. Thus, a culture of innovation and sharing of knowledge is encouraged and developed when those with different expertise and skills co-create by coming together. Most companies nowadays recognize that innovation is central in driving the growth of business even as they seek to maintain competitive advantage. It is for this reason that they have adopted organization-wide programs for managing innovation. This report presents an examination of some of the programs (for managing innovation) of two of Africa’s most successful telecommunication companies namely MTN and Safaricom. The construction basically seeks to compare and contrast the key aspects of their innovation management practices.
Introduction to Innovation Management in MTN and Safaricom
Successful innovation and subsequent development of new services and products are considered pivotal in the overall success of any organization. More specifically, firms in the telecommunications industry must ensure they are not left behind as far as this aspect of development is concerned. They have to do their best and stay ahead of competitors, or at least make sure they are close behind incase they are not leaders in the market. The fundamental objective is to maintain competitive advantage. In this breath, it is appreciated that to design and launch a new product is a risky venture, with much uncertainty as to what the effects of such a development would be. Effective management of innovation and various processes involved in the development of new products therefore involves identifying those ideas with the greatest potential (of success) and adopting necessary measures to lower failure risks. Every company is obliged to give room for best creative techniques in idea generation. Also, every effort must be made to ensure the design of new products and services is done analytically and sales projection and forecasting done accurately. It is imperative that the strategies and tactics employed in the launch of new services and/or products are productive. Here, the strategies, approaches and models applied by MTN and Safaricom in innovation management shall be examined. Before further ado, it is important that some light be shed on the companies under focus. Afterwards, more details shall be presented regarding their respective approaches in innovation management. Relevant comparisons and contrasts shall then be drawn.
MTN
The ‘Mobile Telephone Networks’ (MTN) Group is a multinational company in the telecommunications industry which operates in several countries cutting across Africa, Europe, and the Middle East. It has its headquarters in Johannesburg, South Africa (Paul, 2000). The company’s CEO has been RS Dabengwa as from 1st April 2011. At different times it has sponsored CAF Champions League and APOEL FC (winners of Cyproit First Division for four consecutive years starting 2009 and UEFA Champions League participants for two consecutive seasons five years ago. Also, its sponsorship deal with England’s Manchester United FC on 18th March 2010 was highly publicized.
The company is active in many countries, especially after its acquisition of Investcom. The countries include Afghanistan, Benin, Botswana, Republic of Congo, Cameroon, Cyrus, Ghana, Republic of Guinea, Guinea Bissau, Liberia, Iran, Rwanda, Nigeria, Sudan, South Africa, Zambia, Yemen, Swaziland, and Syria (Datamonitor (Firm), 2009) . As regards its business operations, its main competitors are the telecommunications companies in the various countries where it operates. For instance, in South Africa, it faces competition from Cell C, Vodacom, Telkom Mobile, and Virgin Mobile (Ngoepe, 2008).
There were reports in 2008 about plans by Bharti Airtel, a telecommunications company based in India, to buy the MTN Group. It was reported in the Financial Times that Bharti was willing to offer US$19 billion to acquire 51% Of shareholding in MTN. It that were to happen, Bharti would become the first Indian firm to hold such large stakes overseas. However, the Indian company pulled out of the deal that had been proposed. A few days later, Reliance Communications, another Indian firm reportedly entered talks with MTN for a possible merger of their businesses, a development that would have made it possible for them to have over 116 million subscribers worldwide with a capital muscle of more than $70 billion. However, it was announced on 8TH July 2008 that the tow firms had decided to end any talks regarding the merger. It has never been clear why they did this.
In a word, MTN’s operations cut across the globe and it is appreciated that the company has been largely successful, save for a few court suits here and there. Of interest in this report is what approaches in innovation management it has employed to remain relevant and successful in its operations. Such shall be compared to and contrasted with those of Safaricom, a company mainly operating in Kenya where it has its headquarters.
Safaricom
Safaricom Ltd is Kenya’s leading mobile network operator. It was founded in 1997 as a subsidiary of Telkom Kenya, fully owned by the same company that time. In 2000, the United Kingdom’s Vodafone Group successfully acquired the company’s management responsibility coupled with a 40% stake. The company’s CEO is Bob Collymore who took over from Michael Joseph towards the close 2010. Collymore has been able to handle his management duties due to his experience in the telecommunications industry, having began his career at British Telecommunications in a number of marketing, commercial and purchasing roles for a period stretching over 15 years. There is uncertainty as to the precise ownership of the company (Africa Center for Open Governance, 2011). Recent press reports indicate the government of Kenya, through The Treasury, holds a 25% stake in the company. There have been claims only 35% is owned by the UK’S Vodafone Plc. A further disputed 5 % is owned by a controversial small-known firm registered as Mobitelea Ventures Limited. At some point this prompted the summoning of the then CEO, Michael Joseph, to appear before the Public Investment Committee. He categorically stated he did not have any knowledge about the said shareholder. It is a known fact that Mobitela Ventures Limited completed purchasing 25% of shares owned by Vodafone in 2002 after receiving a grant to do so. Interestingly, Vodafone parted with $10m in 2003 to regain half of the shares. On 31st March 2009 (end of financial year), Vodafone completed purchase of the rest of the 5% indirect equity stake, consequently restoring its initial shareholding of 40%. The company claimed it had the will to disclose details of the ownership of Mobitelea but could not do so as it was bound by a confidentiality agreement (Africa Center for Open Governance, 2011). .
The company’s employees are in the figure of 1500, mainly stationed in Kenya’s capital; Nairobi. The rest are spread over other main cities and towns in the country including Kisumu, Mombasa, Eldoret, and Nakuru among others where its retail outlets are found. The company has secured various dealerships across the country to ensure its services and products are accessed by a majority of the population. The firm boasts of a customer base of more than 12 million subscribers who are mostly found in the named cities and towns.
It has its headquarters at Safaricom House, located at Westlands’ Waiyaki way, Nairobi. Other company main offices are found at the capital’s Central Business District, namely at Shankardass House which is next to the Kenya Cinema complex on Moi Avenue, and I & M building located on Kenyatta Avenue. It is imperative to note that the company is rapidly engaged in corporate social responsibility (CSR) initiatives. For instance, it has committed itself to helping the less fortunate in society through an array of initiatives carried out by its Safaricom Foundation. Its main rivals include Airtel Kenya (its greatest competitor), Orange Wireless, and Essar’s Yu.
In order that a deeper comprehension of the phenomenon under focus be achieved, it is deemed necessary to highlight some of the services and products offered by the company. It is innovation and improvements in these services and products that one is interested to know how they are managed. Briefly stated, the services and products include: electronic cash transfer, flashback service, Kipokezi service (for email and live chat), internet connectivity, text messaging, calls, and electronic gadgets like phones and laptops.
The company, having the largest value of market share in the telecommunication industry in Kenya, has been able to maintain its lead in the sector, almost phasing out some of its rivals. Competition wars have made headlines in the country, a development that made most of the companies lower their tariffs in a bid to maintain their customer base and capture more customers. Nevertheless, Safaricom still remains relatively more expensive as compared to its rivals. Of more interest is the fact that it has still succeeded in remaining the most preferred network provider (operator) in the country. To a great extent, this is owed to its innovation management strategies, which consequently ensure it remains relevant and satisfies its customers. This way, new products and services are developed, completing more the lives of its clients. The approaches in innovation management as employed by Safaricom are presented elsewhere in this report.
Safaricom’s Case
Safaricom is given credit for being a leader in innovation. It is widely recognized for deploying the industry’s best technologies in its bid to remain relevant in the market, thus retaining competitive advantage. It has continually worked towards delivering the best customer experience in the region and industry. Why is innovation so important to the company? Why is it even more important to manage it effectively? What approaches or models does it employ to gain optimal results as far as innovation is concerned?
Within Safaricom, it is widely appreciated that Africa stands out as one of the best regions to conduct telecommunications business. In fact, it is the world’s fastest growing market for mobile telecommunications, having enjoyed annual subscription rise of more than 20% over the past half a decade. Indeed, the continent’s mobile operators are presented with tremendous business opportunities and potential. The mobile network (telephone) sector is indeed driven by innovation in many aspects of business growth. Referring to innovation, it is noted that Safaricom stands out as the best example among firms that have succeeded greatly. For instance, its innovation management strategies were central in the pioneering of its popular M-PESA service (Galpine, 2011). This mobile money transfer system has become the best mobile money payment system in the world. The company’s Chief Technology Officer, Thibaud Rerolle, observed that of all mobile money transactions across the world, half are conducted through M-PESA. In an interview Rerolle pointed out that innovation is one of the most notable differentiating characteristics of the country’s mobile market. More importantly, it is expected to remain eve more relevant and helpful in the future considering that more than 40% of the country’s population is not more than 16 years old. An interesting observation that makes it even more imperative for the company to do more in terms of innovation is the annual increase in connectivity and mobile data usage. The two stand at between 200% and 300%. These have continually gone up with the firm’s periodical offers on entry-level electronic gadgets like smartphones and tablets. A call for effective innovation management is prompted by the need to make these devices relevant in many aspects of the customers’ lives. In addition, the firm’s entry into the enterprise segment makes the case for innovative management stronger.
Safaricom finds the need to innovate and constantly focus on the resulting customer experience for maximum optimization of business opportunities. As such, the company risks being perceived as incumbent if it does not pay the necessary attention to innovation. The result would be a loss of the market share it enjoys in the Kenyan mobile market. After all, being the largest operator in East Africa, it needs to do all it can to attract, retain and find the most out of a wide pool of talent that eventually become its influential workforce. How does it handle innovation processes?
The firm has been keen to apply various models / approaches of innovation management in its operations. The larger management appreciates the need for addressing and sustaining innovation, a very important corporate company objective. The models are crafted by default out of a number of important questions as regards innovation management. They are centered on the objective and mission of innovation, its focus, intensity, funding, and climate. Such would also shed light on any partnerships, alliances, and leadership as well as other processes that are involved in innovation. It is in this regard that R & D processes gain relevance and are conveniently addressed (Sattler, 2011). As it were, the innovation governance model would describe how Safaricom‘s management team allocates its innovation responsibilities, in general or in part within its various departments. Traditionally, a choice can be made to officially entrust a specific person with the mission to oversee and promote innovation. Optionally, a choice can be made to allocate the same responsibility to a particular group of managers who are drawn from different sections within the company. Oftentimes it may not be mentioned that a particular innovation governance model is being employed within an organization but senior managers are at all times better-positioned to give a description of such a model.
The firm under focus has not restricted itself to a single innovation governance model. It is imperatively noted that the model settled upon determines the type and even number of bearers of the responsibility of innovation. Also, the level of management (and resulting involvement) as well as reporting and working relationships of the various sectional and sub-sectional heads are dictated by the type of model being used. Safaricom employs the following:
Top management (or its subset) as a group
Safaricom has it that the overall responsibility of innovation rests with the overall management or a subset of it. This model is the most widely applied and Safaricom has not been left behind in applying it. The firm’s management is of the view that much can be achieved as far as innovation is concerned since it (innovation) happens to be a multi-disciplinary and cross-functional activity which has to be steered at the top and each team member given a chance to offer their input as may be dictated by their specific competencies. Safaricom has followed in the footsteps of companies like Lego, IBM, Nestle Waters, and Corning.
It is noted that in Safaricom, membership to dedicated innovation groups is limited to senior leaders who are most of the time directly involved in innovation activities. Typically, the company has it that innovation groups comprise of commercial and technical or business leaders. Usually, senior staff functions like chief financial officers and those in human resource are not part of innovation teams. The company is very big and usually very busy. It is for this reason that senior officials who may be part of innovation teams deem it necessary to delegate their duties and responsibilities to other colleagues drawn from the top management team. This model has been able to bear fruit since the management usually allocates innovation alongside other items in its regular meetings. Conveniently, a chance is provided for addressing innovation issues whence group heads given a chance to share among themselves their oversight responsibilities for various projects (Afuah, 2008). Such responsibilities are usually those with a high reward/risk profile.
In a word, this approach as employed by Safaricom places more emphasis on the contents of innovation, as opposed to details of the specific processes involved .This is owed to the fact that people at the top ( management) are involved, and a preference is made over new ventures and projects rather than over the particular processes involved (Trauffler, & Tschirky, 2007). . Imperatively, other issues of improvement are delegated to other supporting models which shall be presented below.
Cross-functional, high-level steering group
To compliment its innovation management, Safaricom has applied this model to steer innovation, particularly as a group. In a general sense, it appoints several managers from across different hierarchal levels and functions. These then form an innovation committee that oversees the various processes involved in innovation. This main difference between this model and the one discussed before it is that not all of its members are part of the top management team. Most of the time, the chair or leader of such a group is a member of the executive committee. Within Safaricom, it is not common to see the Chief Research Officer or Chief Technology Officer occupying the position of the chair or leader of the innovation committee.
For one to be a member of the innovation committee, they must qualify on grounds of functional responsibilities as well as display sufficient personal commitment and interest. The company is keen to avoid failure and encourage innovation by avoiding the appointment of skeptics to innovation groups, no matter what their functional responsibilities may be. Most notably, Safaricom assigns such duties to most of its young entrepreneurial innovative managers, mostly on a periodical/rotational basis. It does it even if the implication remains that the managers continue staying low in the hierarchical level. Away from Safaricom, one notes that other big companies like Royal Dutch Shell, Philips, Eli-Lilly, and Tetra Pak have successfully employed this model.
MTN’S Case
As is in any other company, most innovation management aspects have remained a responsibility handled within the hierarchy line of mainstream management. The fruits of such effective management can be seen at MTN in many of the countries it operates in. For instance, in the Republic of South Africa, MTN SA was awarded the highly-regarded Global Telecoms Business award for the best innovation in wireless network infrastructure (Datamonitor (Firm), 2009). More specifically, this award was given after the company successfully implemented the Revenue Assurance solution of cVidya’s MoneyMap. In fact, after its deployment in 2010, the program made cVidya the leading provider of analytics solutions of revenue for the country’s digital and communications service providers.
MTA SA’s head of Revenue Assurance Quintus de Beer is on record for admitting that the advanced solution for cVidya has enabled MTN to move beyond basic revenue assurance to adopt a cautious risk management approach which has consequently impacted positively on billing accuracy and the company’s overall customer experience, further boosting EBITDA and revenue. In a word, there has been significant improvement in operational efficiency and the way business is conducted generally. MTN SA has gone the extra mile to expand cVidya’s operations in analytics domains for revenue intelligence like risk management and the forging of new business lines. Illustration of this award is given in admittance and recognition of the company’s efforts in managing a very pivotal aspect of business: innovation. What model is widely applied by MTN?
Chief research officer (CRO) or Chief technology officer (CTO) as the ultimate champion of innovation
The CRO or CTO approach is recognized as one of the most widely used traditional models of innovation management. It is usually the preferred approach by most engineering-, technology-, and science-based companies (Trott, 2008). MTN applies this model by allocating the responsibility of innovation to these talented individuals who then oversee almost every development as far as new products or services are concerned. Within MTN’s management structure, these individuals are viewed as promoters of new technology as regards the development of new services and products which are meant to positively impact upon customer experience and ultimately increase business volumes through more and more sales.
MTN, operating in more than 10 countries across the globe, has found this model to be most workable in those with strong engineering or technological tradition and sectors. This approach strikes one as being in use when titles like Research President, Chief Engineer, Chief Information Officer, and Senior Vice President R & D and Technology are mentioned. Whatever title is given to these officers, they are the ones the senior management looks up to for guidance as regards innovative developments. Owed to the wide-ranging responsibilities they have, it is not uncommon to find them exercising innovation management with the help of support mechanisms (Mellor, 2006). Within MTN, the officers have their own sectional offices staffed with experts on process and content. The main role of these officers, in collaboration with their heads and other colleagues within MTN is to provide guidance and do whatever that needs to be done for success in the road-mapping of tasks and the assessment of new business opportunities connected with integration of specific new skills and wider adoption of emerging technologies.
The officers are naturally tasked with handling innovation content. This would usually entail the technology as it is applied in the development of specific new products and services (Huizenga, 2006). They mainly focus on the new ventures of business creation that are technology-based. They concentrate on issues of processes and the way such affect the company’s effectiveness in terms of technology and R & D (Le Corre, 2005). In their role, they may set up knowledge and ideation management processes but they usually do not usually interfere in operations of the company that are non-technical. In fact, they may foster a mindset change in R & D which would for instance support cross-sectional and /or inter-disciplinary collaboration within the company, but they do not consider it their responsibility to propagate the effort to the rest of the organization. They may also not feel it is upon them to supervise innovation processes, hence the need for supporting mechanism as mentioned earlier.
The dedicated innovation manager
MTN applies this model of innovation management in a number of countries as may be conveniently decided by respective top managements. Here, it is stressed that the overall innovation responsibility can be the prerogative of one dedicated manager, in opposition to the CTO and CRO who perform specific operational roles (Burns, & Stalker, 2001). Conveniently, where MTN applies this model, it tends to choose the innovation managers from highly motivated upper- or middle-class executives with various functional specializations, usually R & D or typically marketing. Oftentimes, they operate by themselves and report to seniors of the top management team. Occasionally, they have a couple of assisting staff. Their main roles include tracking and conveniently measuring innovation efforts and outcomes (Brem & Viardot, 2013).
The innovation managers identify and share best practices. For MTN they are responsible for supporting innovation initiatives as may be championed by the company. It is imperative to note that they usually deal with side innovation processes as opposed to the content of innovation. More often than not, they are also responsible for MTN’s innovation acceleration mechanisms.
How Safaricom and MTN compare and contrast in terms of innovation management
Before any comparison or contrast is pointed out, it is imperative to note that there are many aspects of the two companies’ innovation management which can not all be entirely exhaustively discussed, let alone be mentioned, within the scope of this report. What is presented here is what is deemed important for overall glimpse and comprehension of the two firms’ innovation management strategies.
Most notable of the differences is as to who is given which responsibility about which content or process. In Safaricom’s case, it is observed that there is a tendency of whole teams focusing collectively on innovation content and processes. There is greater emphasis on content by innovation teams. The responsibility of innovation remains a duty to each and every member of the said team, and anyone within the organization is free to bring forth ideas as to what they may think regarding new technologies that yield new services and products (Holt, 2008). Most importantly, there is a higher degree of management by the top management in the various innovation processes. On the other hand, MTN’s designated innovation officers (depending on the model applied) tend to focus more on the process aspect of innovation, as opposed to content. The top management is not concerned with most R & D processes, since such fall under the duties of innovation officers. However, this is not to say they do not play their supervisory or oversight roles.
As for similarities, most can be drawn on the basis of the fact that the two firms may from time to time apply various models of innovation governance. In one way or the other, different models are applied either as the dominant models or supportively. Whichever the case may be, it is appreciated that general management of technology within the two companies is prioritized and focus is placed upon R & D opportunities and processes which it is believed shall impact positively on corporate revenue, now and in the future. This is the innovation embodiment of the two companies.
The two firms have put in place measures that have facilitated the success of tools for management of product lifecycle and more specifically those applied in the management of technology and R & D processes. They have achieved great success in R & D management while at the same time maintaining the link between product development and the broader objective of integrating R & D knowledge in service and product development. It can not be denied that both firms, in a bid to achieve optimal innovation management, focus greatly on aspects of data management, project management, and workflow management and collaboration.
What can the two companies learn from each other?
Focusing on the various ways and measures of the company’s success, one admits there is much they can learn from each other. For instance, given that Safaricom places emphasis upon teamwork in the various innovation processes, MTN can learn from this that consideration of diversity in all levels and processes of innovation is advantageous in that a wide pool of talent can be harnessed. With more people getting involved, including the top management, a variety of skills is readily available since different people are differently gifted (Christiansen, 2006). In regard to this, MTN should consider broadening the involvement of staff and groups in R & D processes, just as Safaricom has done.
On the other hand, Safaricom can learn from MTN that there are great benefits that can be reaped when R & D management is assigned to specific talented individuals. Perhaps success in this respect can be attributed to the fact that in such a scenario, decision making is easier. Also, consistency that is achieved in many management aspects due to lack of interference is indeed beneficial. In MTN’s scenario, it can be argued that the task of identifying relevant talent and skills is easier since the assigned managers have all the time to concentrate. If Safaricom integrated MTN’s model into its approaches, R & D can get more interesting and fruitful.
Recommendations
In view of how MTN and Safaricom continue to manage innovation it important that they do more to integrate R & D with service and product development. If they gained more visibility into consequential R & D efforts, they would be better-positioned to effectively identify the current and future business/market needs do the necessary alignment as regards resident technology. That way it would be easier to know what is and what is not relevant in terms of innovation content (and processes). Gaps and situations that need to be worked upon would easily be identified, and decisions made regarding the viability of certain technologies. The ultimate outcome would be high customer satisfaction, an objective that drives almost all enterprises the world over.
Where teamwork has not been taken seriously or underestimated, it is recommended that affirmative steps be taken. This is because working together is imperative as regards R & D and wider product development since individuals are diversely talented. It would only be fruitful if these talents are pooled together for optimized innovation. That way, optimal approaches to acquisition of new technology, either developed internally or acquired externally could be adopted, new technology expansion opportunities identified, and avenues of use beyond the current business boundaries identified.
References
Africa centre for open governance. (2011). Deliberate loopholes: transparency lessons from the privatisation of Telkom and Safaricom. Nairobi, Kenya, AfriCOG.
Afuah, A. (2008). Innovation management: strategies, implementation and profits. New York, Oxford University Press.
Brem, A., & Viardot, E. (2013). Evolution of innovation management: trends in an international context.
Burns, T., & Stalker, G. M. (2001). The management of innovation. [London], Tavistock Publications.
Christiansen, J. A. (2007). Competitive innovation management: techniques to improve innovation performance. New York, St. Martin’s Press.
Datamonitor (FIRM). (2000). MTN Group Limited. New York, NY, Datamonitor. http://search.epnet.com/login.aspx?direct=true&db=buh&jid=BDEX.
Galpin, E. (2011). Will there be another M-PESA?: the future for M-banking and payments in emerging markets. London, Searching Finance Ltd.
Holt, K. (2008). Product innovation management: a workbook for management in industry. London, Butterworths.
Huizenga, E. (2004). Innovation management in the ICT sector: how frontrunners stay ahead. Cheltenham, UK, Edward Elgar.
Le Corre, A. (2005). The innovation game a new approach to innovation management and R & D. New York, NY, Springer. http://site.ebrary.com/id/10228873.
Mellor, R. B. (2006). Innovation management. Nærum, Globe.
Ngoepe, M. M. (2008). Quality of service comparison amongst SA’s mobile telecoms industry leaders on value added services (VAS) and service delivery: Cell-C, MTN and Vodacom. Thesis (B.Tech. (Quality and Operations Management))–University of Johannesburg, 2008.
Paul, D. (2000). The Best companies to work for in South Africa. Cape Town, Zebra Press.
Sattler, M. (2011). Excellence in innovation management a meta-analytic review on the predictors of innovation performance. Wiesbaden, Gabler. http://public.eblib.com/choice/publicfullrecord.aspx?p=751117.
Trauffler, G., & Tschirky, H. (2007). Sustained innovation management: assimilating radical and incremental innovation management. Basingstoke [England], Palgrave Macmillan in association with the European Institute for Technology and Innovation Management.
Trott, P. (2008). Innovation management and new product development. Harlow, England, Financial Times/Prentice Hall.
Key trends on Strategic Management Uncertainties Order Instructions: The essay is the exact questions based on the following case study: The first question must includes a matrix by plotting Key trends and uncertainties in order to create four possible scenarios, this is followed by a six hundred word explanation of the two of the scenarios (Key trends and Uncertainties) NOTE: Each quadrant must have a name however only the above mentioned topics must include pointers on the matrix.
Key trends on Strategic Management Uncertainties
The second question nclude a stakeholder map or a (power/interest matrix)followed by four hundred words explaining the impact to the organization both positive and negative.
Key trends on Strategic Management Uncertainties Sample Answer
Strategic Management Analysis
1.0 In the automobile industry, key trends on the habits of consumers towards the purchase of automobiles have been identified. To survive in the increasing global automobile markets, automobile companies are looking at the increasing demand for cars in the expanding middle classes in the developing nations for market share and profits since demand in the mature global markets are beginning due to factors such as the global recession and the high fuel costs. Market growth in developing nations has become a new trend in the current automobile landscape and many big companies. This has led to the development of corporate partnerships between many automobile companies making diversification into emerging markets and corporate mergers as the key to success, while automobile suppliers are focusing on expanding their logistics and distribution as they build new plants in the developing markets (Prideaux, 2011).
Another key trend in the automobile industry is the increasing demand for environmentally friendly hybrid cars. Eighty five percent of automobile companies are increasing investments in research and development in order to produce better innovations in power electronics, battery technology, better fuel efficiency, and lower carbon dioxide emissions. This is because the e-mobility of cars is beginning to be an important global goal in order to reduce the increasing cost of fuel and fuel consumption. The craze for pure electronic cars has gradually reduced to the acceptance of hybrid cars and the internal combustion engine improvement (Bishop, 2005). The customers in the mature markets are also getting rid of less fuel efficient cars and focusing their attention on more fuel-efficient cars and hybrids. Fuel efficiency and the improvement of the internal combustion engine have resulted from the changing urban environment. In the developing world, sixty-six percent of the rising middle class is more comfortable with owning bigger cars such as SUV’s (Plunkett, 2003).
Uncertainties still exist as to the increased excitement of hybrid and fuel efficient technology from the customers. Customers on a global level are increasingly demanding fuel efficient cars that will reduce their fuel costs. However, a recent trend has been arising where a quarter of automobile companies are reducing their ICE research and development budget with China leading at 40 percent (Graves, 2003). 24 percent of the companies are continuing to invest in plug in hybrids, which have also proven to be cost effective in terms of fuel efficiency and consumption. Only eight of the automobile companies in the survey were keen on enhancing their battery technology while 12 percent did not know their research and development budgets. The use of cars in urban centers and the increase of traffic jams in many of these areas will lead to serious legislative agendas towards the use of cars in urban centers. Eighty three percent of the respondents who were interviewed in the KPMG global automotive executive survey for 2013 identified that the impact of vehicle design is likely to impact greatly in the new urban city development and design. Cash cows are viewed as the products of a company that have a high market share in a slow growing market. The slow growing markets are mature industries and hybrid and fuel efficient cars are the most demanded for cars in this market. Hybrids are the new thing with cash generating properties and therefore should be incorporated in the growth strategy for better place. Dog products in the industry include investment on battery technology and as much as this business unit provides social benefits and synergies that assist other business units’ better place should not consider investing in battery advancement unless they are directly related to the production of more efficient hybrid vehicles for the mature markets. The high market growth sectors in this industry are the developing world but vehicles especially those that sell for a higher margin have a low market share (Brown & Flavin, 1979). Due to their potential to sell more cars in the emerging and growing middle class market and gain the market share to grow the business. Therefore, the emerging markets need to be penetrated well to determine if these markets are worth investing in order to grow the market share to become stars.
2.
HIGH POWER – Customers
HIGH INTEREST – shareholders
LOW POWER – employees
LOW INTEREST – government agencies
Power
Interest
The stakeholders in the automobile industry are made up of various groups including the shareholders of automobile companies, the employees of these companies, the customers, dealers, communities, government agencies and regulatory bodies and suppliers. The success of every company depends on employee involvement and support. Positive relationship between employees and the owners of the company who are shareholders help improve efficiencies, cost effectiveness and increases on the quality of the products. It also allows for more development and innovations as these stem from environments that foster and enhance inclusivity. Effective communication with customers helps to deliver the products that customers want and they are therefore high interest stakeholder groups (Eskerod & Jepsen, 2013). The suppliers are also stakeholders with a high power and low interests as the company largely rely on them for vehicle parts. Supplier involvement is also important in the development of competitive global advantage for these companies. Engaging suppliers in the production and distribution processes also ensures that they identify and implement safety measures as well as determine quality cost and productivity improvements. The dealers are also important stakeholders for the companies they are involved in the sales and distribution areas. They need support from the company in many ways including programs that impact positively towards the environmental impacts in the supply chain. Community groups, the local police and other safety organizations are stakeholders with low power and low influence. However, they still matter as stakeholders because they live and work in the communities from which the automobile companies operate. They also make up the customers who buy automobile products. Companies also need to partner with road safety initiatives and organizations including the local traffic police in order to market their products as safe and also ensure that they deliver and communicate to the local communities about the dangers of not pursuing safe driving behavior and following traffic rules (BPP Learning Media, 2012).
The state governments from which these companies operate are also key stakeholders in the operations and running of these companies. Usually, they provide the basic framework in which these companies operate and usually provide tax laws and government incentives on tax payments. A positive relationship and support from the federal and state governments as well as other governing and regulatory bodies by the company, together with goodwill from the people, impact the success of a company. Governing regulatory bodies include environmental agencies that deal with carbon dioxide emissions.
Key trends on Strategic Management Uncertainties References
Bishop, R. (2005). Intelligent vehicle technology and trends Boston, Mass.: Artech House.
Brown, L., & Flavin, C. (1979) the future of the automobile in an oil-short world Washington: World watch Institute.
Buckley, P. (1999). The global challenge for multinational enterprises: Managing increasing interdependence. Amsterdam: Pergamon.
Why do you think competency-based management of rewards is the least popular area of use
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1) I want a typical and a quality answer which should have about 1400 words.
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3) The answer must include examples from experience or the web with references from relevant examples from real companies.
4) Do include all your references, as per the Harvard Referencing System,
5) Please don’t use Wikipedia web site.
6) I need examples from peer reviewed articles or researches only.
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SAMPLE ANSWER
Management and Rewards
Competences have largely been defined as an individual’s characteristics that act as basic prerequisites of work behavior. They revolve around values, knowledge abilities, work style personality, and attitudes. The importance of competences in recruitment, training, coaching, and skills appraisal cannot be underestimated (Ilhaanie, 2010). This fact does not mean that competences are easy to institute and manage. In order for an organization to be successful, the competences of individual workers must be superior, updated, and focused on improving value of the assigned organization. This paper develops an argument that tends to explain why competency-based management of rewards are the least popular area of use.
When organizations chose to eliminate activities that do not add value, they achieve lean operations. This strategy can be complemented by implementing a competence-based reward system (Ilhaanie, 2010). This system uses an employee’s competencies critical to the successful performance of individual roles, to determine the value of their work output.
A competence-based reward system will reward employees for their knowledge, skills, behavior and other characteristics important for organizational success and personal performance and not basically the work activities they perform (Holton, Coco, Lowe & Dustch, 2006). When an organization chooses the competence-based reward system, it must ensure the environment is right for its success. The organization must, thus, make known to the employees the knowledge and skills that are valued by the organization and which it handsomely rewards.
When the standard of competent performance is determined, it makes it clear to employees what training development will be valued. Thus the Human Resource department will points out the training and development resources that will bring the employees to the level desired by the organization (Holton, Coco, Lowe & Dustch, 2006). For example, when a programmer skills set are measured against a lead programmer required competencies, it could emerge that the programmer lacks Advanced Business Application Programming (ABAP). The organization’s Human Resource Department will set in motion strategies to address this. One of which could be to enroll the programmer for ABAP training.
Proponents of Competence-based reward system point out that when it is designed to be the strand that runs between an employees’ pay grade and rewards to particular levels of competence provides objectivity in determining grades. A programmer with a proficiency in system and architectural languages should get a higher pay that one who has just system language. When this is the case, employees learn to associate personal development expectations with level of pay. The organization reinforces their employee behavior that support its mission and business priorities.
When an organization relies on a competence-based reward system, its recruitment strategy will borrow heavily from competence performance standards that link individual career progression and pay. This strategy will be perceived by employees as fair (Ilhaanie, 2010). To employees the ability to differentiate between job grades and titles makes them more confident in the organizations performance expectations. For example, a programmer may recognize that particular management, technical, analytical and communication skills required to obtain a promotion. This could make the employees satisfaction with the system given they view it as adequately addressing promotion and pay increases appropriately. This will benefit the organizations employee recruitment and retention efforts.
Competence-based reward systems do have some challenges, which make fuel critics’ view of the strategy. Given that employees are rated using a general criteria instead of specific accomplishment, these systems could introduce subjectivity in to the evaluation process (Shippmann, Ash, Carr, Hesketh, Pearlman, Battista, Eyde, Kehoe, and Prien, 2000). No two people can interpret leadership or ability to multitask in the same way thus it is possible to have inaccurate ratings.
This strategy, given the subjectivity of the evaluator, could be perceived as promoting favoritism. When an employee perceived him / herself as being more valuable than another, then discovers the other employee remuneration is higher, they could draw the conclusion that they are victims of unfair treatment (Ilhaanie, 2010). Unfortunately, the feeling of unfairness will more often than not result in dissention. This does not add value to the organization nor does it contribute its mission or goals.
Another challenge of competence-based reward system is the realization that establishing the specific competencies that actually result in improved productivity or job performance (Shippmann, Ash, Carr, Hesketh, Pearlman, Battista, Eyde, Kehoe, and Prien, 2000). For example, when a customer experience representative increases the number of enquiries handled in a day, it would be extremely hard to point out whether, the improvement is as a result of improved ability to multitask or increased attention to details thus helping resolve more issues.
In the development and implementation phase of the competence-based reward systems, they can be very complex and labor intensive (Hondeghem and Vandemeulen, 2000). This coupled with the financial investment that must accompany these systems – to cover training and support, could make the systems dear especially when compared to other reward systems.
With the rapidly changing environment, organisations are forced to move towards more responsive and flexible management models. Most organisations seek change in an effort to increase their performance. Competence-based management of rewards has emerged as one of the change strategies that have achieved the desired objective (Tett, Guterman, Bleier, and Murphy, 2000). Despite the competence-based management of rewards system being multifaceted and complex, its basic tenets are concerned with performance, view work as the context in which competencies are revealed, focus on people as opposed to jobs, emphasis on the need of behavioural evidence and reveal that there are several types of competencies that must be considered.
For most organisations, Compensation-based management of rewards has been introduced in the context of major trends or changes. This could include the changing role of managers, down or rightsizing or changes in organisations’ Human Resource practices (Kim and Hong, 2006). When the organisation sets out to develop a more inclusive method of selection, development, assessment or rewarding, it finds Competence-based management of reward to be the most ideal since it is more responsive.
Despite the benefits associated with competence-based management of reward, its implementation in the private and public sector has been selective. Organisations that have embraced competence-based management of reward have tended to focus mainly on management and senior and technical staff (Ulrich & Beatty, 2001). These organisations exhibit a high sensitivity to the competence-based management of rewards. They use both organisational and job variable as a source of competence, which aligns the strategy to the macro-level and personal orientation of competence. Indeed, organisations that embrace and implement competence-based management of reward are fully aware of the major benefits for employers, managers and organisations.
Competence-based management of reward can promote a better understanding of the requirements necessary to achieve high performance and personal development. For this group of employees, competence-based management of reward takes on a motivational role (Fleishman, Wetrogan, Hulman and Marshall-Mies, 1995). To managers, the benefits will be more technical. It offers to managers a more comprehensive tool for decision making and determining criteria in order to effectively manage selection, evaluation and development. It also offers managers a superior frame of reference to manage people.
It offers organisations better instrument for use in undertaking conventional HR practises. This is in addition to facilitating the match with people and enabling benchmarking in competence identification (Virtanen, 2000). When the organisation considers the benefit to be gained by aligning and linking individuals to its goals and values – strategic value, it gains more than having to adopt a more functional approach. Organisation must perform correctly the inference process from itself to competencies and their respective verification levels to derive the full benefits. Similarly, the same is true for its understanding of what competencies are and how best to exploit them for the benefit of the organisation.
Organisations describe Human Resource role as being predominately administrative and less strategic. Fundamentally, the changing role and competencies or HR professional is aimed at increasing effectiveness of HR practice (Gratton & Truss, 2003). It should not be lost that competence-based management of reward is not the best approach. It is the management, which if taken seriously, will provide the organisation a good pretext to experiment new practices and retain the most adequate. Generally, they are good instruments that reduce the knowing-doing gap. For the private organisations, compensation-based management of reward greatly enhances their conservativeness while nurturing innovation and experimentation with management practices and strategies.
Gratton, L. & Truss, C. 2003. The three-dimensional people strategy: Putting human resourcespoliciesinto action. The Academy of Management Executive, 17(3), pp.74-86.
Hondeghem, A. & Vandemeulen, F. 2000. Competency management in the Flemish and Dutchcivil service. The International Journal of Public Sector Management, 13(4), 342-353.
Holton, E. F., Coco, M. L., Lowe, J. L & Dustch, J. V. 2006. Blended Delivery Strategies forCompetence-Based Training. Advances in Developing Human Resources, 8(2), 210-229
Ilhaanie, A. G. A. 2010. Competence-Based Human Resources Practise in Malaysian Public Sector Organisation, African Journal of Business Management, 4(2), 235-241.
Kim, P. & Hong, K. 2006. Searching for effective HRM reform strategy in the public sector:Critical review of WPSR 2005 and suggestions. Public Personnel Management, 35(3), 199-215.
Shippmann, J., Ash, R., Carr, L., Hesketh, B., Pearlman, K., Battista, M., Eyde, L., Kehoe, J.,& Prien, E. 2000. The practice of competency modelling. Personnel Psychology, 53, 703-740.
Tett, R., Guterman, H., Bleier, A., & Murphy, P. 2000. Development and content validation ofa “Hyperdimensional” taxonomy of managerial competence. Human Performance, 13(3), 205-251.
Ulrich, D. & Beatty, D. 2001 From partners to players: extending the HR playing field. Human Resource Management, 40(4), 293–307.
Virtanen, T. 2000. Changing competences of public managers: Tensions in commitment. The International Journal of Public Sector Management, 13(4), 333-341.
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This article will focus on operational risk management. After reading chapters 1, 2 and 7 in Essentials of Risk Management, you should have a basic understanding of what is involved in managing risks within a corporation. It focuses on the operational considerations. Most of these considerations involve the employees in some way. It provides an example of a company that failed to use risk management properly explains how it could have helped them to avoid their problems.
Costs of Operational Risk Management
Every risk in a business organization has got its own costs associated with it. Risk management is among the very basics and essentials of an organization. Poor risk management will cost the organization highly in terms of finances or even the public image. Proper and effective risk management will help the organization tackle issues in a very effective and efficient manner, which is less costly as compared to addressing the risk after it has occurred. Risks can result out of employees, technicalities in operations, and poor management strategies (Risk Center, 2013). In order to manage risks effectively, the organization needs to identify the risks and categorize them into strategic and operational risks. The former are those risks that come up due to the decisions that are made by the management, which affect the business adversely or negatively. A single operational risk may not affect the organization so much but the occurrence of the same, for instance, more than twice will affect the organization greatly. For instance, an occurrence of a single burglary in an organization may not affect it so much but its repetition will affect the organization greatly in terms of financial loss. This risk indicates a gap in the security systems of the organization and if not addressed effectively, then the entity is likely to suffer a great financial loss (Youngn& Coleman, 2009).
In the year 2007, the United Kingdom Government taxation authority, HM Revenue & Customs (HMRC) incurred a very great operational risk. In this case, personal details of 25 million people that were stored in two CDs were lost in the internal emails. The fallout from the loss of these CDs included the resignation of the HMRC chairman Paul Gray due to the organization’s substantial operational failure. This is a very good example of an operational risk, which has got a very great financial loss for the country.
Operational Risk Management Board
The operational risk management board cannot be able to manage risks by itself; however, it is responsible for formulation and implementation of control systems that can deal with the problem appropriately. The board can establish a risk committee that is to monitor exposure, actions taken, and the risks that have materialized. The risk committee will be tasked with the responsibility of assessing the operational risks in an aggregate over the whole organization. They make a decision on which risks are the most significant and the appropriate actions to be taken in order to counter them. In order to achieve this effectively, the risk committee needs to set priorities for the control systems and liaise with the internal audit through the auditor to ensure that these risks are covered (Bauer & Erdogan, 2012).
This risk committee can be supported by a risk management function, which shall be responsible for establishing a risk management framework and the appropriate policies and regulation in regard to effecting or the use of the framework.
risk management
The risk management function should also promote risk management by providing the appropriate information and training of the employees regarding how they can manage the risks that are available within their department or area of specialization. Apart from ensuring specific risks are dealt with appropriately, managers will be concerned with their local working environment and will deal with conditions that may cause risks to materialize (Bauer & Erdogan, 2012). For instance, they shall have to assess whether the employees are working excessively long hours and are more likely to make mistakes due to overworking. The managers shall also supply information to senior managers to enable them in assessing the risk position over the whole organization. In essence, the employees are held responsible for taking the appropriate steps to manage the risk and preventing risks from occurring. The senior management and the risk management committee are held responsible for ensuring that the employees have the appropriate knowledge and skills for dealing with the risks.
After the operational risk analysis by the operations committee, the organization can classify operational risks into two broader categories, which include low probability high impact risks and high probability low impact risks. The management of low probability but high impact risks can involve insuring the risks in question so that when they occur the organization can recover quickly to avoid much financial loss (White, 2014).
Operational Risk Management contingency plan
For the other risks, they can choose to use a contingency plan. A contingency plan serves to replace or replicate the efforts of other systems. This is commonly used by having generators or other sources of energy standby so that when there is a blackout, the production process can continue. The contingency plan can also be applied in information systems. In the above case of the United Kingdom taxation authority, replication of information materials could have helped manage the risks. In the current world, there are several methods and means of storing digital information, this includes cloud computing. Had the management used other alternative methods of storing the data, they could have recovered easily from the loss (White, 2014).
Managing operational risks is very essential in every organization. Clear analysis of the likely risk should be done, and then the appropriate measures to manage the risk are identified. The information is availed to the relevant people on how to manage the risk; this can involve training of the employees and equipping them if necessary. Poor risk management strategies result in large financial losses for the organization.
Operational Risk Management References
References
Bauer, T., & Erdogan, B. (2012), Organizational behavior (1.1 ed.). Nyack, NY: Flat World
Knowledge.
Risk Center, (2013). Operational Risk: Operational Risk Regulation and Assessment.
Most of the internal threats in the organization are as result of errors and poor corporate practices by the employees. For instance, internal threats of the organization include both intentional and accidental problems such as fraud, mishandling of information by employees, errors due to lack of competence. Security of the organizations database may fail victim of the human error. External threats may include both external and external accidents. For instance, the modern computer systems with some components residing on the public internet pose risks. As such, a chain of occurrences such as a storm cutting out power to a server may affect the IT database. Other threats take the form of competition, political, economic, and social factors (Dragnić, 2014).
Methods to Detect Internal and External Threats to the Organization
The value chain and SWOT analysis are tools for detecting the internal threats of the organization while the PESTEL, Porter’s five forces analysis tools are useful in detecting the external threats of the organization (Dragnić, 2014).
Methods to Protect the Organization from Internal and External Threats
The organization can adopt the more sophisticated technologies to safeguard information. Regular audits are necessary to ensure that finances are being utilized appropriately. Monitoring and evaluation of programs is effective in addressing effectiveness (Menguc et al., 2010). Strategic planning and management ensures that the company stays on top of the competition.
Proactive Plan of Environmental Scanning to Evaluate any Existing Threats to AGC
The first step will entail gathering information about the externalities i.e economy, laws, demographic, and government factors. Next, AGC will need to focus on its competitors in terms of trends, threats, and opportunities that might impact its business. The other step will entail conducting an internal scan of the AGC in terms of strengths and weaknesses. Data should be collected through a series of methods such as focus groups, publications, library, leaders, and media. After collecting the data, analysis will be undertaken to identify changes that require to be made (Menguc et al., 2010).
The Purpose of a Code of Conduct
The code of ethics is a guide and reference for employees in undertaking the plans of AGC in achieving its goals. It protects the company and informs workers of their expectations. The code will help AGC to develop and maintain the standard of conduct for its employees, customers, vendors, and suppliers/partners (Dragnić, 2014).
Challenges of Virtual Offices
Virtual offices present several challenges including unproductively and communication problems (Menguc et al., 2010). However, these challenges can be overcome through a robust IT system that supports remote environment.
The Role of Human Capital Managers
The role of the HR is changing from the previously considered support function to a more strategic partner in helping companies achieve their goals. The HR managers at AGC will help in enhancing the employees’ contribution towards achieving success and competitive advantage (Menguc et al., 2010).
References
Dragnić, D. (2014). Impact of Internal and External Factors on the Performance of Fast-Growing Small and Meduim Businesses. Management: Journal of Contemporary Management Issues, 19(1), 119-159.
Menguc, B., Auh, S., & Ozanne, L. (2010). The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm’s Performance. Journal Of Business Ethics,94(2), 279-298. doi:10.1007/s10551-009-0264-0
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Part 1 1000 words maximum
Part 2 1000 words maximum
Part 1; There have been numerous corporate scandals in the past 15 years, most of which caused the companies affected to subsequently experience financial difficulties. Prominent frauds include HIH Insurance and Onetel (Australia), Satyam computers (India), Societe-General and Parlamat (France), World.com, Enron and Waste management (USA), Barings Bank and Equitable life Ins (UK) Royal Dutch Shell (Holland), Olympus (Japan), Duetche Bank (Germany) and Siemens (Greece).
(i) Select a fraud from three different countries and describe the nature of the fraud.
(ii) Explain the causes of the frauds using the fraud triangle.
(iii) Using the fraud triangle as a framework, compare and contrast the influence of cultural and social factors in each international jurisdiction on the cause of the frauds.
Part 2; Answer the following questions based on the case study below:
Alex McAdams, the recently retired CEO of Athletic Shoes, was honoured to be asked to join the Board of Consolidated Mins (CMI) International Inc. Alex continues to sit on the Board of Athletic Shoes, as well as the Board of Pharma Advantage another publicly traded company on the New York Stock Exchange. However, CMI, as it is known, is a major step up for Alex.
CMI was formed as the United Mines Company in the 1870s, by an American railway magnate, and in 1985 it became Consolidated Mines International Inc. It operates mines in Central America and northern South America. In 2004, its revenue were approximately $4.5 billion and it employed about 25,000 people worldwide.
In deciding whether to accept the board seat, Alex conducted his own due diligence. As a result, there were two issues that he wanted to raise with Cameron Derry, the CEO of CMI. One concerned the allegations of questionable business practices. The other concerned the political instability in several of the Latin American countries in which the CMI mines are located. Today Alex was meeting with Cameron at the Long Bar Lounge.
During lunch Cameron candidly talked about the history of the company and the bad press that it often received. “In the 1920s we were accused of bribing government officials and using our political connections to have unions outlawed. In the 1950s we were accused of participating in the overthrow of a Latin American government. In the 1990s there were charges that we were exploiting our employees, polluting the environment, and facilitating the importation of cocaine into the U.S. But, none of these allegations has ever been proven in court of law,” said Cameron. “And we’ve even successfully sued one newspaper chain that published a series of these unproven stories about us”.
“As for the political environment, Alex, you’re right. There is no effective government in many of the countries in which we operate. In fact it is often the paramilitary that are in control of the countryside where we have our mines. These are very unsavoury organizations, Alex. They have their own death squads. They have been involved in the massacre, assassination, kidnapping, and torture of tens of thousands of Latin Americans, most of them peasants and workers, as well as trade unionists and left wing political figures.”
“Do they interfere with CMI’s operations?” asked Alex.
“No, and that’s because we’ve been paying them off. It’s now 2014 and we’ve been paying them since 1997. To date we’ve given them about $1.7million in total. Don’t look so shocked, Alex. Occasionally, we have to do business with some very unsavoury characters. And the United Peoples Liberation Front that controls much of the region around our mines is probably the worst of the lot. They are involved in disappearances, murder, rape and drug trafficking. The payments we make to them are for our protection. If we don’t make these payments it could result in harm to our personnel and property.”
“That’s extortion!”
“We don’t call it that. We list these payments as being for ‘security services, but we have no invoices to support the payments, and beginning in 2002 we began making direct cash payment to them. But, we now have an additional problem. The United State government has declared the United People Liberation Front to be a terrorist organization, and our outside legal counsel has advised us to stop making the payments. But if we stop I’m afraid of what might happen to our employees. I don’t want to support drug trafficking and terrorism, but I need our mines to stay open.”
“I’m telling you this Alex, because when you join the Board, the first item on next months’ agenda is these payments. I want the Board to approve that we continue to make these payments in order to ensure the safety of our Latin American employees and operations.”
(i) Discuss the ethical issues in the case above with reference to the principles of professional conduct.
(ii) What should Alex do? Justify and analyse the case above using AAA ethical decision making model and arrive at a decision.
SAMPLE ANSWER
Governance and Fraud
Part 1
Corporate scandals in India, USA and Australia have indicated that corporate accounting fraud is the greatest problem in the corporate world that is rising in occurrence and severity. Research shows that the alarming rates of fraud have damaged the reliability of financial reports, resulted to considerable economic losses and corroded the assurance of investors on the efficacy and consistency of financial statements (Jones, 2011).
Corporate accounting fraud is an economic or political scandal that arises from the disclosure of fiscal offenses by trusted organization managerial. Such fiscal offenses often involve multifaceted ways of mishandling or misusing funds, overstatement of corporate value assets, understatement of corporate expenses, overstatement of revenues, or under-reporting the extent of liabilities (Romney & Steinbart, 2008).
In the US, corporate accounting fraud has crippled many companies. The Enron Corporation, an American energy company located in Texas, was declared bankrupt in 2001 following claims of immense accounting fraud that led to the loss of $78 billion in stock market value, leading to the fall of Arthur Andersen and the enactment of the Sarbanes-Oxley Act of 2002. Following a severe fall in the company’s stock price in 2001, the shareholders of Enron filed a $40 lawsuit, which prompted the U.S. Securities and Exchange Commission (SEC) to begin an investigation. Dynegy, Enron’s rival made an offer to buy the Enron at an extremely low price, but Enron put down the offer, and Enron was compelled to apply for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Enron Corporation’s $63.4 billion in assets made it the biggest corporate bankruptcy in the history of the United States until WorldCom took up the bankruptcy record in the following year.
Regardless of legislative reactions to the rising trend of corporate accounting fraud in the United States, which led to much stricter corporate guidelines with amendments to the UN Sentencing Guidelines and the enactment of the Sarbanes-Oxley Act of 2002, colossal corporate fraud still continues to prevail in the country.
The collapse of a prominent Australian corporation OneTel has indicated the inadequacy of corporate governance practices in Australia (Albrecht & Albrecht, 2004). HIH Insurance was liquidated in 2001 with losses ranging between AU$3.6 billion and AU$5.3 billion. In a similar way, just prior to its collapse, OneTel, which was once ranked as the fourth largest telecommunications company in Australia and one of the ASX’s fastest growing companies, revealed an operating loss of AU$291 in 2000. The collapse OneTel was triggered by many problems including questionable related party dealings, potentially unnecessary management compensations, unproductive working capital management, improper auditing, destructive financial reports, untenable business policies, and poor corporate governance. The failure of this Australian company highlights the significance of not only having good corporate governance practices but also ensuring thorough execution of the same rather than plain paid “lip service” (Jones, 2011).
The fundamental problem of Australian companies as highlighted in OneTel is their keenness in pursuing low yielding businesses and failing to set aside adequate capital to cater for future liabilities. Predictably, the problem has been catalyzed by the failure of management and the board of directors to efficiently implement and scrutinize due diligence practices.
India has also experienced massive corporate fraud particularly since the wake of the 21st century. In 2009, it was revealed that the chairman of Satyam Computer Services, one of Inida’s largest computer IT companies serving many global corporations such as 185 Fortune, had manipulated corporate books in various commercial dealings. Satyam’s chairman was also found to have engaged in mishandling of assets, increasing expenses, forging documents, and manipulating of profits, inventory value and income, since 2001. The losses encountered by Satyam were estimated to be US1.5 billion, that is, two and a half times the sum of the Enron Scandal (Bhasin, 2013).
The fraud triangle consists of three components that act together to lead to fraudulent behavior and they include pressure, opportunity, and rationalization (Albrecht & Albrecht, 2004). Pressure involves the motivation of a person to commit fraud. It includes financial, lifestyle, and emotional motivation. In Enron’s case, financial pressure existed for top management to meet the Wall Street analysts’ expectations. As for Satyam and OneTel, the top management engaged in fraud due to lifestyle motivation.
Opportunity refers to the condition or situation that allows a person or an organization to commit the fraud, hide it, and switch it to personal gain (Barney, 2009). The conditions at Enron, Satyam, and OneTel that provided an opportunity to commit the fraud were the companies’ control framework; the control environment, the control procedures, and the accounting system. The companies’ top management failed to accept the responsibility to provide conducive work environment. In addition, proper and effective accounting systems could have provided an audit trail, particularly a paper trail that could make it easier to detect fraud. Furthermore, the conditions in the three countries provided opportunities for the perpetrators to switch the misrepresentations into personal gains. During the respective frauds, top management received large bonuses.
Rationalization is a form of mental justification by perpetrators of their illegal behavior. Most perpetrators in the three fraud scenarios were first-time offenders with no criminal history that allowed them to use rationalization to hide their dishonesty. Due to the fact that the crimes committed were non-violent, the perpetrators did not appreciate the consequences of their actions.
The frauds committed by the three companies were influenced by cultural and social factors. The Enron scandal was triggered by the pressures for economic success that had commenced in the late 20th century and was characterized by a perceived expansive growth that heightened the expectations of corporate success. Enron was a victim of these expectations which resulted to the growth of a fraud designed to mislead the public until the economic face improved.
The management in all the three companies did not carry out effective fraud education training to the employees to tell and show them the devastating consequences of fraud. Since the top executives of the companies condoned fraud, the other employees did not feel that fraud had devastating consequences and thus, they could not hesitate to commit fraud. The frauds were also influenced by permissiveness of the activities in their cultural environments and lack of an ethical environment that condemns fraud.
Part 2
Ethical issues in the case with reference to the principles of professional conduct
The principles of professional conduct are varied due to the fact that every profession has its own code (Weissman & Debow, 2003). However, all codes often work towards the promotion of the public interest, integrity, objectivity, independence, confidentiality, technical and professional standards, competence and due care, and ethical behavior. These principals also apply to all members in public practice.
As regards public interest, while acting in the course of the interests of their employers, professionals must put into account legal requirements and any loyalties and responsibilities owed to the community. Thus, in all its endeavors, CMI should ensure that it does not disregard public interest while furthering its own interests. Integrity requires members to show straightforwardness, sincerity, and honesty in their approach to professional work. An employee who discovers that his employer has committed or is about to commit an unlawful act should make all relevant efforts to convince the employer not to continue perpetuating the unlawful act and to rectify the matter. Objectivity requires professionals to be fair and not allow prejudice and conflict of interest to override their objectivity.
The principle of independence requires that professionals should act independently without any interest that is considered inconsistent with objectivity and integrity. Despite the fact that employees cannot be independent of their employers and there are certain legal duties such as keeping information confidential, they also have responsibilities towards directors, shareholders, other executives and employees, and third parties such as customers, banks and suppliers. Another principle of professional code of conduct is confidentiality. It is important to respect the confidentiality of information acquired in the course of work and disclosure to a third party without specific authority is unethical. Professionals also need to observe ethical behavior by conducting themselves in a manner consistent with the good reputation of their profession and refraining from any conduct which might bring discredit to their profession (Flanagan & Clarke, 2007).
The principles of professional ethics require all professionals to promote and support the highest level of ethics in their profession and uphold the highest standards of professional conduct. Professionals are also required to use only ethical and legal means in their course of operations while protecting the public against unfair practices and fraud and promoting all practices that bring respect and credit to the profession. It is also an ethical requirement for professionals to provide accurate and truthful information with regard to the performance of their duties at all times.
The facts of the case indicate that CMI has several ethical issues. The first ethical issue is with regard to integrity. The company’s bribing of government officials and using its political connections to outlaw unions raises integrity issues. It also raises the issue of employee mistreatment whereby the top executive officials make decisions to mistreat other employees, even to the point of breaking the law. The outlawing of unions deprives employees a platform for them to raise their concerns on issues such as paid leave, working hours, wages, discrimination, sexual harassment, and wrongful and unfair dismissal.
Other ethical issues are in respect to the company’s pollution of the environment, exploitation of employees, and facilitation of the importation of cocaine into the US. These issues are against the principle of protection of public interests. In addition the company’s funding of the United Peoples Liberation Front raises ethical concerns due to the fact that the organization is involved in harmful activities such as drug trafficking, rape, murder and disappearances. Making payments to this unsavoury terrorist organization raises the question of public interests, integrity, and competence and due care.
What Alex should do using AAA ethical decision making model (The Institute of Chartered Accountants in Australia, d.)
Determine the facts
Alex should establish the facts as to who, what, where, when, and how the problem was committed. Alex should find out the facts before raising the matter with Cameron. He should document his findings, noting that the employees have been mistreated, the company is funding a terrorist organization, polluting the environment, and facilitating drug trafficking.
The significant stakeholders and definition of the ethical issues
Stakeholders of CMI include Cameron Derry, directors of the organization, shareholders, and creditors. The ethical issues include Alex’s responsibility to Cameron Derry versus his own integrity, Alex’s responsibility to the organization versus his responsibility to Cameron, and Alex’s responsibility to the organization and Cameron versus public interest. Overall, Alex’s dilemma is what further action he should take regarding the information he has gathered.
The applicable fundamental principles and any other rules or values
Alex needs to demonstrate integrity, technical and professional standards, and competence and due care.
The alternatives
By doing nothing, Alex would breach the principles of integrity, technical and professional standards, and competence and due care. Resignation would satisfy the three principles, though it would abrogate responsibility. Raising the concerns with the board members informally would not give Alex an opportunity to explain himself. By trying to convince Cameron Derry to stop breaching ethical and legal duties, Alex would be acting in consistence with integrity and it allows Alex the opportunity to explain himself.
Assessment of the consequences
If Alex decides to do nothing and allow the company to continue funding the terrorist organization, it would pacify the ethical problems affecting the company, and this would cause devastating legal consequences to the operations of the company. This would cause Alex to breach his ethical standards as outlined in the Code. If he chooses to resign, the problem might never be identified, which may cause detrimental problems to the company. If he talks informally with the board members, it may preserve Alex’s integrity and may lead to an independent investigation, though it can have a negative impact on Alex’s career aspirations. If he tries to convince Cameron to put an end to harmful practices, Cameron might consider rectifying the problem.
Decision-making
In light of the analysis, first, Alex can once more convince Cameron to rectify the issue basing on his findings. If this is not successful, Alex can raise his concerns with the board and other stakeholders. If again not successful, Alex can resign.
References
Albrecht, S. & Albrecht, C. (2004). Fraud Examination and Prevention.
Barney, J. L. (2009). Corporate scandals, executive compensation, and international corporate governance convergence: a US-Australia case study. Temp. Int’l & Comp. LJ, 23, 231.
Bhasin, M. L. (2013). Corporate Accounting Fraud: A Case Study of Satyam Computers Limited. Open Journal of Accounting, 2: 26-38.
Flanagan, J., & Clarke, K. (2007). Beyond a Code of Professional Ethics: A Holistic Model of Ethical Decision‐Making for Accountants. Abacus, 43(4), 488-518.
Jones, M. J. (2011). Creative Accounting, Fraud and International Accounting Scandals. John Wiley & Sons.
Romney, M. B. & Steinbart, P. J. (2008). Accounting Information Systems. Reading, mass: Addison-Wiley.
The Institute of Chartered Accountants in Australia. Joint Guidance Notes GN – Members in Business Guidance Statement. Retrieved from: http://www.apesb.org.au/attachments/GN1.pdf
Weissman, H. N., & Debow, D. M. (2003). Ethical principles and professional competencies. Handbook of psychology.
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Significant Management Challenges Gen Y Poses on Gen X
Significant Management Challenges Gen Y Poses on Gen X
Order Instructions:
Your system has the essay description which is below
Managing Gen “Y” poses significant challenges for the Gen “X” manager
explain how the concepts of early management theorists may be used to effectively improve the performance of a modern organisation. Using the following topic and a management theorist, or a number of theorists, from the following list, students should construct a solution that might prevent or mitigate the management and workforce challenges described in the question:
“Managing Gen “Y” poses significant challenges for the Gen “X” manager”.
Describe the situation surrounding the aging Gen “X” workforce and its managerial interaction with Gen “Y”. Which management theories can a Gen “X” manager learn and exploit in order to effectively manage a Gen “Y” workforce.”
Also try to connect the effect of the technology on both Gen X and Y
“Managing Gen “Y” poses significant challenges for the Gen “X” manager”.
Describe the situation surrounding the aging Gen “X” workforce and its managerial interaction with Gen “Y”.
Which management theories can a Gen “X” manager learn and exploit in order to effectively manage a Gen “Y” workforce.
Commentary and feedback will not normally be placed on a student’s submission. A separate grading sheet will be provided and attached to the paper with the examiner’s comments and grade. Papers will be returned in lectures, or tutorials, typically within 10 working days of submission.
Papers will be assessed against the following criteria with the examiner awarding one of the selection items (a) through (d) to the paper in each criteria. For this item, as a general rule, a=(up to) 10 marks, b=(up to) 7.5 marks, c=(up to) 5 marks, d=(up to) 3 marks. The examiner’s final comment has a maximum weighting of (up to) 10 marks :
1. Hurdle requirement Pass/Not Pass:
a. The item has been presented in the medium of written English. Sentences are structured and conform to academic writing guidelines. The paper has an identifiable structure including an introduction, a main body, and conclusion. The paper follows the Harvard Referencing Style. The examiner can proceed with further assessment.
b. The item has not been presented in the medium of written English and the examiner cannot proceed with further assessment. Sentences are not structured and do not conform to academic writing guidelines. The paper does not have an identifiable structure including an introduction, a main body, and conclusion. The paper does not follow the Harvard Referencing Style.
2. Theorists and concepts. This section has a total potential value of 10 marks
a. The paper comprehensively references one or more key management theorists and comprehensively explains their theories.
b. The paper effectively references at least one or more key management theorists and effectively explains their theories.
c. The paper adequately references at least one or more key management theorists and adequately explains his or her theories.
d. The paper does not adequately reference one or more management theorists, nor does it explain his or her theories.
3. Current practices. This section has a total potential value of 10 marks
a. The paper comprehensively identifies current practices in an organisation that can be improved, and describes why they need improvement.
b. The paper effectively identifies current practices in an organisation that can be improved, and describes why they need improvement.
c. The paper adequately identifies current practices in an organisation that can be improved, and describes why they need improvement.
d. The paper does not identify current practices in an organisation that can be improved, nor does it describe why they need improvement.
4. Application of management theory and principles learned in MGT5MPT. This section has a total potential value of 10 marks
a. The paper comprehensively describes management concepts learned in MGT5MPT and comprehensively explains how these might improve work practices in the contemporary workplace.
b. The paper effectively describes management concepts learned in MGT5MPT and effectively explains how these might improve work practices in the contemporary workplace.
c. The paper adequately describes management concepts learned in MGT5MPT and adequately explains how these might improve work practices in the contemporary workplace.
d. The paper does not describe management concepts learned in MGT5MPT, nor does it explain how these might improve work practices in the contemporary workplace.
5. Final Comment. This section has a total potential value of (up to) 10 marks.
Discuss with reference to one or more of the theorists below:
Babbage
Taylor
Fayol
Gant
Gilbreth
Follet
Max Weber
Barnard
Maslow
Please present a draft essay considering the matters above within 12 hours
SAMPLE ANSWER
Significant Management Challenges Gen Y Poses on Gen X
Generalization about generations and their universal features has become part of the modern world. The generalization relates to social, economic, educational, and cultural disparities between age groups and how they have been affected by the economy, culture, and technology. Due to the delayed retirement of the baby boomers and faster entry of young people into the marketplace, senior management is likely to deal with more than three generations. The workplace has developed to a community of diverse generations. Boomers are around 65 years old of age; generation X is about 30-45 years old, and the millennial group known as the generation Y are 20-30 years old. The work styles of these individuals are quite different; they have completely different opinions and views. Therefore, managing one generation by a manager from a different generation has become a big predicament that faces the organizations. Currently, most workplaces are occupied by generation X and Y whose age differences are not quite big but their ideas, lifestyles, and opinions are totally different (Remesar 2012, n.p.). To deal with this kind of disparity, the managers need to know the situation around these generations, and also the skills that manager X should learn to deal with the most ambitious and digital Gen Y for the betterment of the organization.
Comparison between Gen X and Gen Y
Generation X was born between 1965 and 1976. Thus, the group is currently between 35- 46 years old. Events that define every generation typically impact their lives by the time the individuals turn around twenty years old. Therefore, defining occasions for this generation were events such as Watergate, the AIDS epidemic, the popularity of MTV, the appearance of non-traditional families, and the development and fame of computers and the internet. This was the first generation to see their parents more work focused than family focused. Additionally, this generation saw a change in work, ethics, entertainment, business and government. Individuals of this Generation are skeptical, independent, and less loyal than the previous generation. They are more loyal than the next generation, and less enthusiastic to sacrifice their lives to work. According Erickson (2010, p.14), “They moved their focus from the ‘nose to the grindstone’ archetype of their grandparents, to the quality of life paradigm that supports free time and looks for a balance between play and work” .
Generation Y, or the millennials, were born between 1977- 1994; this generation is now aged between eighteen and thirty-four years of age. The marking life events for this generation were the great fall of the Berlin Wall, the Columbine learning institution shootings that occurred on September 11th, 2001 (Blazev 2014, p.9). Some events also included the deadly War in Iraq, Thailand and Indonesia, Tsunamis in Japan, and the popularity of iPods, cell phones, and iPads. This generation falls into three major personalities: the rebel the rationalist, and the sensualist; however, people may be a weighted combination of the three personalities.
Rationalists are ruled by motives where their goals are materialistic in nature with a monetary focus. These knowledge workers can excel in analysis work, accounting, development, and finance. Rebels are ruled by their desire to rule and of course rebel from the environment. Unlike the rationalist, this generation is not driven by monetary gains and is choosy yet ever motivated. It should be noted that the rebels are not often successful in a teamwork environment; however, promotion, sales, and product development suits this group. Sensualists are guided by sensual pleasure and look for pleasure, as an escapist, rather than power or monetary driven gains. Moreover, this generation craves for relationships and seeks ideas from other people (Remesar 2012, n.p.)
Millennials in overall have a worldwide perspective, are patriotic, optimistic, fast-paced multitaskers, assertive persons, self-learners, self-aware, spiritual, and have a “different or confused” value system. They are independent, determined, selectively commit to goals and stoic, and see endless information and new technology always. According to Saichev and Sornette (2011, p.345) of the Chicago University Business Review, most Americans are now working longer hours than before; she argues that this is creating antipathy in the generation Ys that are going into the workforce. Same way Remesar (2012, n.p.) says that the millennials are self-confident and self-aware of their own desire and goals, this group do not need “a lot of work and little life dynamic” as the previous generation and baby boomers” (Srinivasan 2012, p.52). Generation Ys want a very flexible life and work equality where they are always challenged. A study carried by Lowe (2010) reveals that regardless of where they come from, expect them to work in new, and a diverse ways based on their expected rhythms. They are not confined in the offices for more than 8 hours since they want to do other things. In order to attract Generation Y employees, managers should value time as currency; compressed schedules, telecommuting, flextime, and job sharing all appeal to generation Y.
This theory is very relevant to the conversation for managing the generational split. Some of the experts have suggested that as Gen Y enters the job market, there has been a constant shift in the dynamic of the workforce’s requirements (Srinivasan 2012, p.55). It has been proposed by organizational psychologists that the preceding generations have been motivated and driven by their need for Self-Esteem” in the workplace. Employees before Generation Y have to put a higher value on factors such as title, salary, and respect from their bosses or colleagues. Conversely, millenials seem to put a higher premium on mentorship, work-life balance, and challenging the norms. Some psychologists posit that this procedure began with Gen X’s climb the proverbial organizational ladder (Srinivasan 2012, p.50). It is currently manifesting itself in the preservation practices being implemented in organizations in order to attract, and importantly keep the Generation Ys on staff.
Humanist Theory developed by Carl Rogers and Abraham Maslow concerns human beings and their ability to select choices throughout the life “within the constraints imposed by heredity, personal history, and the environment” (Remesar 2012, n.p.). The theory shows an existential drive for universal purpose and meaning. By self-assessment tools, cooperates are in a position to analyze knowledge employee behavior; it includes assessing important thinking, personal improvement and firm value added, and connections with colleagues through a self-reflection (Leask & Barron 2013, p.22). This self-assessment helps companies in accounting for employees’ existing development and generates a benchmark from which to consider the coming development and growth. Questionnaires are used in order to assess team or individual performance. In these questionnaires and through the workplace behaviors, expectancy, self-esteem, desire, and self-confidence are measured. It is very important to note, nonetheless that expectancy, self-esteem self-confidence, and desire are measured by the people based on what they expect the outcome to be, how brawny their desire for success are and the confidence with which they trail it. As such, results merely account for how each person or team feels as though they accomplished certain goals rather than weighing the superiority and success of the goal itself as compared to another teams or individual performance (Ramesar 2012, n.p.).
Technology has many effects on both of the generations that may be negative or positive. Leask & Barron (2013, p.31) say that the introduction of technology has molded individuals in Gen Y, who are lazy and hate hard work. He argues that there are cases when the physical interaction is needed not just sending emails to the offices. However, Erickson (2010, p.21) says that the introduction of technology has created people in generating Y who are smart and need very little exercise to perform firm’s activities. Additionally, the technological effects have eroded the origin culture of interaction. The Gen Y has online friends, and physical interaction is very limited to a few individuals. Many individuals in a workplace that belong to Gen X feel out of place, for those who do not understand these technological advances either boycott such duties or tell the digital group to assist them. As such, they feel they are not good enough for certain organization, hence, are not motivated and feel disappointed. The old employees also feel that the technological advances will rob them their position hence at times feel frustrated.
Following the delayed retirement and early entry of young people in the job market, managements have been faced to handle more than three different generations whose ideas and values differ. Gen Y and Gen X occupy most of the functions of the organizations. These groups are different in the way they do and perform their roles and air out their ideologies. They see the world in two different viewpoints. The Gen Y is known to be smart and digital while Gen X is described as manual and know little about the technologies as compared to Gen Y (Leask & Barron 2013, p.34). Following the aggressive nature of Gen Y, managers of Gen X have found it quite challenging managing this digital generation. Gen Y is fearless, respect the leaders according to their legacy and not age. For Gen X managers to successfully handle these individuals, they have to archive the command and control form of leadership and embark on motivational theories that ensure everyone has a role in the organization.
References
Erickson, TJ 2010, What’s Next, Gen X? : Keeping Up, Moving Ahead, And Getting The Career You Want, Boston, Mass: Harvard Business Press.
Leask, A, Fyall, A, & Barron, P 2013, ‘Generation Y: opportunity or challenge – strategies to engage Generation Y in the UK attractions’ sector’, Current Issues In Tourism, 16, 1, pp. 17-46, Hospitality & Tourism Complete.
Lowe, S 2010, Managing In Changing Times : A Guide For The Perplexed Manager, Los Angeles: Response Books.
Remesar, A 2012, Urban Regeneration. A Challenge For Public Art [1999]. Edition 2005, n.p.: Publicacions de la Universitat de Barcelona, RECERCAT
Saichev, A, & Sornette, D 2010, ‘Generation-by-generation dissection of the response function in long memory epidemic processes’, European Physical Journal B — Condensed Matter, 75, 3, pp. 343-355.
Srinivasan, V 2012, ‘Round Table: Multi generations in the workforce: Building collaboration’, IIMB Management Review, 24, pp. 48-66.
Blazev, AS 2014, Power Generation And The Environment, Lilburn, GA: The Fairmont Press, Discovery eBooks
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Functional organization types and their pros and cons
Functional organization types and their pros and cons
Order Instructions:
Watch the “Structuring Your Organization” video.
Write a 350 to 700-word summary of your team’s discussion of each functional organizational types and their pros and cons
SAMPLE ANSWER
Functional organization types and their pros and cons
Introduction
Different organizations adopt different structures that they deem essential to facilitate their operations. These structures provide guidelines on how employees communicate sets and regulate policies, as well as source of authority and responsibilities of the staffs. The author deliberate on the various pros and cons of different organizational structures as discussed in the movie.
Discussion
One of the types of organizational structure is functional. In such structures, various people hold similar positions hence perform related tasks and are expected to use same level of skills. Such structures are normally used in large entities to ensure division of labor (Digital films, 2014). Advantages of this structure are classified under coordination and motivation. One of the benefits of this structure is that communication is easy because the people share various attributes such as skills and experience. It becomes very easy for people that share various aspects meet and communication on various issues (Digital films, 2014). The process and time of making decision is less. Because of shared skills and knowledge, the people have same perspectives on certain aspects and therefore, it becomes easy and less cumbersome to reach a decisive conclusion/decision. Benefits related to motivation include enhancement of performance evaluations for supervisors. It is easier for the supervisors to monitor on progress of subordinates and when it comes to rewarding those that perform exemplary while discouraging lazy staffs. This structure gives peers an opportunity to evaluate and monitor colleagues hence a source of encouragement and inspiration. The structure as well creates an ambiance environment for development of teamwork that may culminate into the development of norms, values and cohesion among a group stimulating high performance (Montana & Charnor, 1993). This structure has as well a number of cons. One of them is that it is a bit cumbersome to render efficient services especially with increase in the products and services the company deals in. It also becomes a challenge to meet the different needs of the continued increasing number of customers. The last con is that it is a challenge to meet all the needs of an entity especially if it expands in many regions.
Matrix is yet another popular structure that many entities adopt. This is more complex as it groups senior staffs according to the function and as product team members (Digital films, 2014). Subordinates in this structure have a product and a functional boss.
This structure has pros as well as cons. One of the benefits of the structure is that it enhances the process of product development in an entity. There is cooperation and effective communication across the team members making the process to flow smooth. The structure encourages creativity and innovation as managers have different expertise. Decision-making is also improved through the teams (Aquinas, 2008). Employees have freedom and autonomy when it comes to execution of their tasks improving their performance. Some of the cons of these structures include increased cases of role ambiguity and conflict. Two bosses may cause a conflict when they address a solution. Employees as well experience role ambiguity when it comes to whom to report and remains answerable. The level of work stress is also high due to ambiguity and conflicts. Because of lateral movement, opportunities for promotion are minimal contributing to low morale among employees.
In conclusion, it is evident that all these structures have pros and cons. It is therefore important that managers adapt to a structure that best address their needs and helps in achievement of their goals and objectives.
References
Aquinas, P . (2008). Organization Structure and Design. Anurag Jain Publishers.
Leading and Change Management Order Instructions: Case study research assignment (50%): An essay of 3,000 words identifying a strategic planning or change management initiative within an organisation with which you are working or with which you are familiar.
Leading and Change Management
The requirement can be past, present or future. The essay will need to draw heavily upon the learnings from the workshops supported by students’ own research.
Leading and Change Management Essay Sample Answer
Leading and Change Management
Assessment of the strategic initiatives employed in the case study: Journey of Hong Kong Public Teaching Hospital in Preparation of Hospital Accreditation will be based on Kotter’s 8-Step Change Model. Strategic planning refers to a disciplined attempt that offers basic decisions and actions, which contribute to the shaping and guiding what a firm is, what a firm does, and why such a firm does what is does, in relation to the future (Heward, Hutchins & Keleher, 2007, 176). Strategic planning focuses on three cyclical elements, which are often known as the ABCs of strategic planning. They include: moving from component A to component B takes into consideration the clarification of vision, mission and objectives; moving from component A to component C represents a process of strategy development/formulation, whereas moving from component C to component B represents the aspect of strategy implementation. The case study focuses on the aspect of preparation accreditation, which is aimed at transforming Queen Mary Hospital’s culture and fostering safety, effectiveness, reliability of services and quality.
In 2008, Hong Kong SAR Administration and Hospital Authority’s Food and Health Bureau launched a pilot plan of hospital accreditation. Accreditation involves a process in which health institutions/hospitals struggle to offer high quality care in relation to the external peer-reviewed standards (Chiu, Seto & Lai, 2011, pp. 231). This concept is gaining a global popularity, but happens to be a novel idea in Hong Kong’s health care system. Most of the workers are ignorant of the concept or means of preparation. As such, developing new ideas can be discouraging to both frontline staff and hospital executives. This problem can be compounded by situations in which health care facilities lack sound and robust quality management schemes/plans.
In relation to Kotter’s 8-Steps Change model, Queen Mary’s management should be developing a sense of necessity/urgency, which is step 1. Major projects of change can emerge successful when they obtain adequate support from the organization’s employees. As such, organizations should ensure that they begin the process of transforming their institutions by convincing members of staff of the significance and urgency of moving a new direction. In relation to this, the hospital’s management should gather it staff members and inform them about the hospital need for accreditation (Heward, Hutchins & Keleher, 2007, 177). Being that accreditation is aimed at improving the quality of health care services in hospitals, Queen Mary’s management should inform its staff about this necessity. Moreover, since many health care employees are unaware of this concept, the hospital’s management should use this opportunity to inform them about it, and its significance. This step is significant in ensuring that the hospital’s employees develop the determination/willpower to move and win.
A false sense of necessity/urgency and complacency alongside anger, frustration and anxiety act as the principle stumbling blocks to change in organizations. To succeed individuals should often focus on the significant/important aspects of change. Creating a sense of urgency will ensure that the hospital’s management succeeds in minimizing cases of complacency, anger and anxiety among its employees in relation to the intended change. In the real sense, urgency not only acts as a significant trigger for the change, but also serves as the engine or driving force of change (Hillol & Viswanath, 2013, pp. 1125). Successful creation of a sense of necessity among staff members requires that change management leaders, point out the risks and potential opportunities that arise from the business environment in relation to the intended change. Successful leaders often accomplish this goal by appealing to the minds and hearts of workers. One of the approaches that the firm’s management can employ in accomplishing this goal is conducting a SWOT analysis.
SWOT analysis will play a vital role in pointing out the external environmental aspects, which are the threats and opportunities, and the internal environmental aspects/company’s internal environment dimensions, which are weaknesses and threats. While addressing weaknesses and threats, focusing on the opportunities provides suitable platform on which the organization’s management can build strengths and enhance performance (Heward, Hutchins & Keleher, 2007, 178). Exploring the hospitals internal environment helps in the revelation of its core competencies alongside its distinctive core competencies as shown below:
Leading and Change Management Essay Strengths
Significance of Queen Mary Hospital to the community: the hospital acts as a tertiary referral center kidney, heart, liver, bone marrow transplantation and lung (Chiu, Seto & Lai, 2011, pp. 231). Moreover, the institution is affiliated to the University of Hong Kong, which makes it significant to students who often conduct some of their learning it.
Financial position of the institution: Currently, the hospital’s annual is estimated to be over HK$30 billion. This robust financial position is significant in funding the intended change (Chiu, Seto & Lai, 2011, pp. 231).
Robust Partnership: Being a public teaching hospital, the Hong Kong SAR Administration and Hospital Authority’s Food and Health Bureau has opted to partner with the firm in enhancing the implementation of the change.
Robust staff Capacity: The hospital employees more than 4800 individuals who can be employed in leveraging the process of delivering of high quality care.
Leading and Change Management Essay Weaknesses
Many staff members with the organization are not aware of the concept of accreditation (Chiu, Seto & Lai, 2011, pp. 231).
The hospital lacks a suitable mechanism of ensuring that its staff members deliver high quality care to patients.
Conducting an assessment on the external environment will help the hospital’s management identify the following threats and opportunities.
Leading and Change Management Essay Opportunities
Support from the government: Hong Kong’s government aims at enhancing the process of change implementation in Queen Mary Hospital (QMH) through the Food and Health Bureau
Support from the NGOs: Apart from the government , the change implementation process in the hospital is supported by the ACHS (Australian Council of Health Standards)
Most health institutions in the country have not implemented this concept: the hospital is at an advantage of gaining a competitive benefit over its rivals who in terms of delivery high quality care to patients. Many health care institutions (Hong Kong Authority Hospitals) have not implemented the concept as it is not popular in Hong Kong.
Leading and Change Management Essay Threats
Threat from the Inclusion of other Hospitals in Change’s Pilot Scheme: other hospitals are also inclined towards the implementation of the same change in their institutions. The accreditation exercise has been joined by three private health care institutions and five public hospitals (Chiu, Seto & Lai, 2011, pp. 231). As such, the organization is likely to face an intense rivalry from these institutions in terms of funding from the sponsors. Besides, the Queen Mary Hospital is likely to witness intense rivalry from these institutions in relation to the delivery of high quality health care, which is the principle purpose of the accreditation process.
Step 2: Establishing a Guiding Coalition
Formation of a coalition of individuals to be in charge of leading the change exercise process acts a significant step towards the realization of a successful change implementation process. Members of the team should have enough expertise, credibility, power, and excellent skills of leadership. Moreover, these individuals should have a share aim as it is vital in the realization of a successful strategy implementation process (Hillol & Viswanath, 2013, pp. 1127). When members of the change implementation team have a common objectives, issues such as conflicts, which are always associated with different interests, can be minimized in an effective manner. Moreover, lack of a shared objective among individuals selected to spearhead the project can result into wastage of resources. As such, organizations should ensure that they are involved in the selection of individuals who have shared goals to lead the change exercise.
The consideration of aspects of leadership skills, expertise, credibility and power is also significant in ensuring that individual who are selected to lead the strategy implementation have the necessary physical and intellectual abilities, which are required for successful execution of the change implementation exercise. Such abilities are vial in ensuring that these individuals provide adequate guidance to other people who are included in the change process. Furthermore, the possession of such potentials is significant in ensuring that the core team is at a suitable position of addressing challenges that can be encountered during the strategy implementation process in an effective manner.
Queen Mary Hospital’s management responded to the accreditation exercise an effective way. This reaction occurred twenty-four months prior to the formal process of accrediting QMH. The formation of the projects core team took into consideration individuals from with robust leadership skills, credibility and expertise (Hillol & Viswanath, 2013, pp. 1129). These individuals were recruited from various disciplines such as allied health, nursing, laboratory, administration, clinical specialties and pharmacy among others. Such a selection was significant in ensuring that issues from various perspectives cold be integrated, thereby leading to the realization of a rational decision-making process. QMH’s Chief Executive acted as the core team’s patron. The core team’s function was to oversee the entire change implementation/accreditation exercise.
Step 3: Establishing a Change Vision
The third step that could have been followed during the implementation of the change is development of a vision for the strategy. This role was to be played by the core team. The establishment of a vision for the change could have served as a basis for efficient decision-making. Efficient decision-making during change implementation can be accomplished in an effective manner when an appropriate vision is developed for the exercise. Developing a vision for a change implementation exercise ensures that strategy executors have a clear direction of as to where the project heads.
Developing a vision for the project could have also contributed to the motivation of the core team members towards taking action in the appropriate direction in case the initial steps of the project happened to be painful. Strategy implantation is not a smooth process as it is always associated with other drawbacks such lack of adequate funding, conflicts among core members and resistance (Scott, 2010, 481). As such, establishing a clear vision for the process is vital in ensuring that core team members remain in the right path despite encountering such challenges. Furthermore, such vision offers a significant meaning to individuals. It also serves as glue that binds every aspect of the change implantation process.
QMC’s management could have ensured that a clear vision is developed for the accreditation exercise. This vision needed to be imaginable, desirable, feasible, focused, flexible and communicable. By being imaginable, the vision could have ensured that it conveys a clear picture/view of what the future would be to the organization. This feature could have contributed positively to the motivation of core team members, and other stake holders. The aspect of desirability could have ensured that the vision remain appealing to the long-term interests of the organization’s management, staff and other stakeholders, thereby minimizing cases of resistance (Hafiz, Ali-Fazal & Fareeha, 2014, 194). The aspect of feasibility could have ensured that the accreditation’s vision contain attainable and realistic goals. For instance, change’s vision could have been developed in manner that does not compromise the organization’s financial potential of HK$30 million. This undertaking could have ensured that the company’s resources are taken into consideration, thereby minimizing the wastage of the firm’s resources. By being focused, the strategy’s vision could have provided a clear guidance on the direction that should be taken in relation to the realization of an effective decision-making process. Consequently, the aspect of flexibility could have ensured that the strategy’s vision allow alternative responses and individual initiative in relation to the changing circumstances involved in the accreditation exercise. Some of the factors that could have been considered in the attainment of this goal are the company’s resources and other alternatives of funding. By being communicable, the change’s vision could have ensured that it is explained in an easy and quick manner to the target group or stakeholders (Foltin & Keller, 2012). This aspect could have also contributed significantly to the minimization of cases of resistance from the firm’s employees/staff members.
Step 4: Communication of the Vision for Buy-In
The next step that could have been embraced by QMH’s management is spreading the strategy’s vision through the firm/organization. This approach could have ensured assisted the organization management in receiving opinions of employees about the vision (Feyerherm et al, 2014, pp. 1167). As such, it could have provided a suitable platform on which changes that matched the interest of employees could have been made. Moreover, this step could have provided a suitable platform on which employee engagement could have been achieved. Employee engagement in a strategy implementation exercise helps in minimizing cases of resistance as it makes them feel as part of the change process.
Effective communication of the change’s vision is significant in ensuring that all individuals involved in the change implementation exercise comprehend the process. As such, QMH’s management could have ensured that they employ various mechanisms in communicating the strategy’s vision to employees and other stakeholders. For instance, the organization’s management could have attempted to employ mechanisms such as story telling in communicating the vision to the target groups (employees and stakeholders). Such an approach could have helped in making the strategy’s vision more vivid than in a situation in which only words were used in communicating it (Decker et al, 2012, pp. 43). Leaders should ensure that they motivate and inspire employees as this helps in overcoming cases of mistrusts in the organization.
Step 5: Empowerment of Borad-Based Action
Once QMH’s management had ascertained that its employees had accepted the novel vision, it could have adopted measures that are aimed at empowering employees to act upon the new vision. The core team can contribute significantly to the realization for this goal. This team can achieve this objective by engaging in an active removal of barriers, which are associated with the accreditation process. In the case study, is clear that the core team engaged in the identification and elimination of barriers that were encountered during the accreditation exercise. Some of these barriers were complacency, vested interest, technical businesses terms, inertia, lack of alignment of key stake holders and core team members understanding and ideology on accreditation and poorly managed meeting among others (Diane et al, 2014, pp. 75). Leaders should ensure that they are involved in a active process of addressing the barriers or resistances to change.
The Four types of resistance that leaders should focus on addressing are rational factors that arise from different evaluations between management and employees concerning the need for change and results, non-rational factors such as emotional responses, poor management and political factors. As seen in the Case study, individuals often resist organizational change due to self-interest or vested interest. Besides, individuals can resist change due to issues such as disturbance/interruption of social networks, loss of face, and fear of unknown outcomes and change-averse among others (Canato, Ravasi &Philips, 2013, 1743). Some of the methods that people often employ in resisting change are anticipation and humor. As such, leaders should prepare adequately to address such issues as resistance can lead to skill gaps. After addressing such issues, QMH’s management could have ensured that all members possess appropriate systems, tools and skills that are needed in the realization of the intended change. In addition, the organization’s information systems and human resource systems could have been employed in implementing the vision at this stage.
Step 6: Generation of Short-Term
QMH’s management could have then proceeded to the generation of short-term wins stage. Major and long-term efforts of change often lose their momentum earlier than expected. For change implementers to uphold/maintain the sense of urgency and motivation of everyone involved, they need to point out their short term successes. This step could have involved the mentioning of the successes that the company has achieved prior to the achievement of the main objective (Casida & Parker, 2011, pp. 484). Besides, the company could have enhanced this step by celebrating such achievements. This often plays often contributes positively to members’ motivation, which is essential for the accomplishment of the project’s main objective.
Short-term wins also contributes to the taking out of winds of sails of resistors and cynics. Research indicates that organizations that witness significant short-term successes have higher chances of completing their transformation processes in successful ways that those firms that do not witness significant short-term wins (Casida & Parker, 2011, pp. 485). Such organizations are often characterized by high levels of motivation on the part of employees and members of core teams.
Step 7: Consolidation of Gains and Production of More Change
Declaration of victor prior to the full incorporation of the business improvement and changes into the organization’s culture can lead to a significant failure. As such, firms should not overindulge in the celebration of short-term success as such this tendency may lead to the loss of focus on the major vision. Moreover, such an act can result into the killing of the ongoing momentum, thereby allowing resistors to gain control of the process (Taina, 2013, pp. 54). In relation to this, the company’s management should have also taken this aspect into its consideration while celebrating its short-term wins during the change implementation exercise.
Project leaders should use this stage a suitable platform on which they can realize more change. They should ensure that they employ the increased credibility from the previous wins in enhancing the change process. At this stage, QMH’s management could have involved new groups of individuals in the process of accreditation (Taina, 2013, pp. 56). Moreover, such individual could have been promoted to major roles. The level of focus and urgency should be kept constant to avoid people from engaging in activities or actions that can derail the change implementation process.
Step 8: Incorporation of Changes into the organization’s Culture
The final stage of the Kotter’s 8-steps Change model involves the incorporation of the changes into the organization’s culture. In relation to this, QHM’s management could have finalized the accreditation process by incorporating the policies and guidelines that are associated with it into the organization’s culture. After incorporating these approaches into the firm’s culture, the management could have embarked on constant process of communicating the improvements or benefits realized from the accreditation process (Tyler & Jonathan, 2014, 327). Consequently, this stage should be accompanied by the establishment of leadership succession and development plans, which are in line with the norms and values of accreditation.
Processes of change often put significant demands on managers and executives alongside the entire organization. Kotter’s 8-step framework offers a robust checklist for many things that should be taken into consideration during the process of change execution (Wilson, 2014, pp. 49). The key requirements/prerequisites for the steps involved in this model are a sense of urgency, excellent leadership, open information exchange or open communication among the involved groups and constant communication across various levels of the company.
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