Mgmt10003 Organisation And Management Technological Assessment Answers

9.Identify and discuss the control tools that are used for controlling organisational performance. Comment on these as they relate to the SMART objectives that you identified in question 7.

Answers:

Introduction

The Warehouse group is one of the largest retail organizations in New Zealand. Founded in 1982 by Stephen Tindall, The Warehouse Group now operates from different stores in New Zealand under diverse brand names. The company functions the departmental retail stores vending a wide range of grocery and non grocery products. It sells a varied range of products including clothing, groceries, gardening, entertainment products and electronic goods. In the last thirty five years the company has developed to have ninety two stores around the country (Tahir, 2017). With the steady development in the last few years the company has become one of the biggest general merchandise and apparel retail organization in the country. Besides having the retail outlets, the group also has a variety of its own products. The Warehouse group has offered variety of products to the consumers in a much lower price than its other competitors in the market because of establishing the extended supply chains in the Asian countries and earns most of the revenue from those suppliers. However, even if the organization sells goods in a much lower price, it has been criticized several times for the quality of its products.

Seven Dimensions of Organisational Culture 

The tool of Seven Dimensions of Organisational culture was identified in 1997 by the two management consultants Charles Hampden- Turner and Fons Trompenarrs. The model was developed to understand the distinct features of differences in the organizational culture. There are seven dimensions; the first dimension universalism vs. particularism is concerned with the standards which measures the relationships in the organization (Byrne, 2014). In the universalism culture the employees place a huge importance on the rules and regulations and it comes before any relationship, whereas in particularism employees believe that each circumstances demand different rules and the responses might change with the change of situation. The warehouse group totally follows the culture of particularism, because it always thinks its employees to be an integral part of the brand. The second dimension of the culture is the individualism vs communitarianism, where in individualism employees believe in having personal achievement and freedom; however in commnitarianism culture employees considers the group interest to be more important than the individual interest. In Warehouse group the people believe in group interest more than anything in the organization because the company is passionate about its consumers (Hughes & Allan, 2016). The third dimension specifies the involvement of the employees where in a specific situation employees try to keep the personal and professional life different as it might impact on the work objectives. However in diffuse situation there is an overlap between the personal and professional life. In this concern organization the culture can be considered to be specific as most of such overlapping of professional and personal life is avoided here. The fourth dimension tool used to analyse the organizational culture is the neutral versus emotional tool, where in neutral culture employees can manage their emotions effectively and logical understanding influences their action. In the emotional culture people express their emotions in different ways and try to build rapport and trust amongst themselves (Parsons & Wilkinson, 2015). In the Warehouse group there is a strong emotional culture where the management and the employees put emphasis on building trustworthy relationship. Another dimension tool is achievement versus ascription, where in the achievement dimension there is a frequent usage of performance appraisals however in ascription culture power and position matter the most and it is more authoritative.  In warehouse group the organizational culture is not at all authoritative; rather the organization values its employees as the human resources are the most significant part of the operations. It is an achievement culture which is quite common in Australia and New Zealand (Houqe, Monem & van, 2016). Another dimensional tool that determines how the employees manage time in the organizational culture is sequential time versus synchronous time. In sequential time culture there is a high value placed on planning and punctuality. On the other hand synchronous time culture employees work in a time flexible environment, which is absent in the Warehouse group, because the organization believes to maintain the punctuality and fulfils the demands of consumers on time. The last dimension tool is internal versus outer direction where the former culture allows employees to have a control on their learning and develop skills, but the outer direction culture provides right resources to people to do the jobs effectively. The Warehouse group has a typical internal direction culture.

Porter’s Five Forces Model

This model is another simple yet powerful tool to analyze the business situation. Through this model the situation of the Warehouse group in the retail industry of New Zealand has been evaluated here.

Bargaining with the buyers 

The bargaining power of the buyers establishes the amount of pressure customers put on the margins. The retail consumers are large in number in New Zealand but the tendency of buying the amount indicates that they do not buy products in bulk amount (Williamson et al., 2016). This indicates that the bargaining power of the buyers is in a weak state. In New Zealand it is more economical to buy from a single retailer rather to buy from the host of the retailers.

Bargaining Power of the Suppliers

The retail industry of New Zealand is dominated by few big suppliers such as the Warehouse group. Therefore switching from one retailer to another does not seem costly for the giant retail house like the Warehouse group (Bradbury, 2015). These giant organizations dominate the group market share and dictate the price in the market.

Threats from the new entries 

The strong and growing economy of the retail industry in New Zealand attracts several new entries in the market. International retail chains like Wall mart are now planning to enter the market in New Zealand (Wilkins, 2014). However the existing experienced retail groups like the Warehouse put a strong barrier for the new entries.

Competitors in the Industry

In this force the capacity, behavior, pricing, variable or fixed cost, differentiation, concentration, company and the market growth are considered. The major competitors of the Warehouse group in the national retail scenario are Kmart, Farmers, the Briscoe’s and Super Cheap Auto (Luiten at al., 2016). The rivalry in the retail industry is quite intense and the rivals tend to use the price cuts in order to boost the unit sales.

Substitution 

In the retail industry there are several numbers of competitors, therefore switching from one company to another for lower costs is very common in the national scenario (De Silva & Forbes, 2016). The competitors of Warehouse focus on the reduction of price and provide better services to the consumers.

PESTEL analysis

The PESTEL analysis tool is used to analyze the external environment of an organization use for future strategic planning. It consists of the political, economic, social, technological, environmental and legal factors.

Political 

The political factor determines the stability of government and their influence on the industry as well on the specific organization. The government of New Zealand has a direct influence on the retailing industry regarding the fair trading, hours of trading and competition in the market. The industry is booming also because of the continuous support from the government and generating a large amount of revenue. As far as the taxation is considered importing into New Zealand is tax free if the payable duty is less than $60. The country activates minimum duty on the imported products in the national market. The government also implemented a specific scheme for the retail industry so that the employees are benefitted from their workplace (Birchall, Murphy & Milne, 2015). The Warehouse group has several effective policies for their employees so that they can save a good amount of their income as they provide several products in a cheap price for their employees.

Economic 

The economic factor determines the economic performance of the organization that influences the long term economic effects of the organization. This factor includes interest and exchange rates, business cycle, GNP rend etc. The economy of New Zealand shows a strong sign of recovering the international financial crisis and the 2010 and 2011 earthquake. The government has increased the minimum wage of the individual employee and that has a constructive effect in retaining the employees.

Social 

The social factor is crucial in influencing the choices of the consumers in the market. The changing social attitude, concern and lifestyle in New Zealand have resulted in drastic changes in the retailing industry. The modern customers are more concerned about obesity, hygiene and health issues, so the healthy food products and eco friendly organizations are more popular in New Zealand (Mowat, 2014). Also, since the immigration policy of the country has already attracted several migrants from all around the globe, foods from different nationalities are also in high demand in New Zealand.

Technological 

The development of electronic gadgets and internet expansion has made the online shopping popular than the traditional shopping. The retailers were forced to incorporate online shopping because of the changed behaviour of the consumers.

Environmental 

The advanced technology has made the reduction of carbon emission, management of energy much easier. The organizations have also reduced the waste and started recycling them.

Legal 

There are no such legal complications in the retail industry and the government is supportive towards the retailer.

SWOT analysis

From the previous findings the SWOT analysis of the Warehouse group can be done to evaluate the company considering their internal strengths and weakness with the external threats and opportunities.

Strength 

Warehouse is one of the biggest retail chains in New Zealand and it is going strong over more than thirty years. The primary strength of the organization includes its vast knowledge of the industry, financial backing, cost leadership strategies, existing consumer base and the IT returns from the online shopping (Mowat, 2014). Since the company is in the industry for a long time it has the entire knowledge. Warehouse also has an existing strong consumer base and fixed buyers. The financial backing is enough strong of Warehouse, for instance they have bought the Noel Leeming Group in 2013. There is also strong IT return through the online shopping.

Weakness 

The primary weakness of Warehouse involves higher labour cost, inefficiencies in work and negative publicity. Several times the employees have problems to communicate with the manager when the consumers required refund. Therefore the company should implement automated refund machines (Luiten at al., 2016). There is also a higher labour cost issue that might reduce the profits of the company. Also there is little negative publicity that may enhance the reduction of consumer base.

Opportunities

The future opportunities of Warehouse are expansion of the market, increased detraction of retail business and the healthy market environment. Warehouse should target the younger consumers so that it is benefitted in the long run. Warehouse should implement few entertainment and discount policies so that the new consumers get attracted towards the retail chain.

Threat

The threats include government regulations, increasing prices of commodities and the rising competition in the market. There are several competitors who provide lower prices so the consumers can compare those prices and opt for other retail chains (Kelsey, 2015). Also there are few regulations from the government that can charge more for the exportation. All these will increase the prices of the products that might affect the benefits of the company.

Planning and Controlling

Warehouse may plan to have two strategies which are cost leadership and globalization. The company should implement the cost leadership strategy to aim the offering of lower prices and several types of goof quality goods in a low price to the customers. The objective of this strategy would be the reduction of the costs and increasing of efficiency in delivery and production. Warehouse can also have its entry in the international market with this strategy. With the globalization strategy the company can increase its cross country investment and benefit their communication and IT sectors.

Conclusion 

With the new plans and adopted strategies Warehouse can trigger in controlling its environment and the company can increase its revenue. If Warehouse enters a different market, it will not have many issues with the new entries in the domestic market. The company can increase its revenue from the international markets. It has a strong financial backing so that it will not have much problem in implementing these strategies.

References

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