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Impacts of Changes to Sothebys Company - Research Paper Example

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The paper "Impacts of Changes to Sotheby’s Company" discusses that Sotheby’s Company should have stringent security measures in the provided e-commerce platforms. This is imperative given the sensitivity of the information they receive from their clients. …
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Impacts of Changes to Sothebys Company
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? IMPACTS OF CHANGES TO SOTHEBY’S COMPANY By Table of Contents Introduction and Background……………………………………………………………. 3 Terms of Reference………………………………………………………………………. 3 Procedure………………………………………………………………………………… 5 Technological Changes……………………….………………………………………….. 5 Changes in Auctioneering Process…………………………………………………….…. 6 Impact of Technological Changes to Sotheby’s Company ……………………………… 7 Impact of Technological Changes on Buyers and Sellers………………………………… 8 Financial Policy Changes……………………………………………………………….… 8 Conclusion………………………………………………………………………………… 9 Recommendations………………………………………………………………………... 10 Bibliography…………………………………………………………………………….... 12 Impacts of Changes to Sotheby’s Company Introduction and Background Sotheby’s is a multinational corporation that has its origin in Britain, but is currently headquartered in New York. It is one of the world’s largest brokers of decorative and fine arts real estate, jewelry, and collectibles (Innovation, Theories of Art, and Sotheby’s Company 2011, 63). The company divides its operations into three segments. These include finance, Dealer and auction. Among other products and services, the company deals in a range of services including Private Sales to Corporate Art Services. Traditional operations of Sotheby’s Company make it the fourth oldest auctioneering company in continuous operation in over 40 countries and with 90 locations worldwide (Gus 2012, 44). By December 2011, the company boasted of 1446 employees worldwide. Sotheby’s is arguably the world’s largest art enterprise with global sales that totaled up to $5.8 billion in 2011 (Gus 2012, 44). Relative success of the company can be attributed to its efficient mode of operation that it established right from its inception in 1744 in London. The company has maintained a culture of management that looked at the business in three distinct dimensions. The company viewed and treated the business as having the categories of finance, auctions and finance. Sotheby’s is a master at managing timing during biding struggles among wealthy buyers. This is a unique piece of art the company has learnt to perfect and preserve over the years. Auctioneering capabilities of the company has made it become a marketing timer as well. In November 2013, the company’s shares were trading just below the highest level hit in two years. The company announced reviewing its finances and capital allocations in a bid to determine the best options it has of returning capital to shareholders. Terms of reference This report focuses on intricate analysis of the procedures the company uses to acquire and sell the products it involves in. Additionally, the research places emphases on financial changes that the company has developed and how it is expected to change the future of the company. Other than considering the changes that have taken place from the earliest years of the company, the research puts into account dynamics in the design of the business to the latest plans the company has. It is aimed at providing academic reference to academicians and general audiences who have the interest in knowing the development of Sotheby’s as it embraces changes over the decades of its existence. It was compiled and presented on 15, November 2013. Procedure In order to determine the effects of change on the operations of Sotheby’s Company, the research took an analytic assessment of publications concerning the development of the company over the years of its existence. The researcher appreciates that conducting a primary research could have been the best in providing the view of the company’s stakeholders on the ground. However, this was not possible given the nature of business the company deals in and dispersion of its clients. Locating and interviewing the company’s ardent customers (both sellers and buyers) was difficult, so the research resorted to empirical analysis of existing publications to provide an informed viewpoint on the effects of changes on Sotheby’s Company. In particular, the research procedure focused on intricate analysis of the procedures the company uses to acquire and sell the products it involves in. Additionally, the procedure of this research places emphases on financial changes that the company has developed and how it is expected to change the future of the company. Other than considering the changes that have taken place from the earliest years of the company, the research procedure puts into account dynamics in the design of the business to the latest plans the company has- up to November 2013. Findings Technological Changes Auction procedure in Sotheby’s has moved through the years to embrace all forms of technologies that have affected business operations in history from its existence. The company’s strength, weaknesses, opportunities and threats of the company rely in the manner that it handles the changes presented by nature (Bonn 2010, 72). This keeping in touch with dynamics of the business world has been intricately integrated into the business running of the company over the decades without compromising the core values onto which the company is founded. Currently, the company uses the latest technologies in serving its strong clientele base. The company appreciated the importance of keeping in touch with the needs of the market. Efficient and fast service to the clients of the company has been the secret that has enabled it exist as competitors come up and vanish. For the length of time that the company has been in existence, its auctions are often held during the day. It has not deviated from its culture of making the auctioneering processes free and opens to the public by limiting the number of auctioneering procedures that are done in private at a fee. Over the years, the company has inculcated a little change to fit the changing lifestyles and customer needs. In order to cater for the working nations that it has extended its branches, the company introduced occasional evening auctioneering events. These evening auctions require that all attendants but attendance tickets, though no one has compelling obligation to bid. For the over 260 years, the company has kept the tradition of announcing the objects on sale in the house and announcing the starting price which is often lower that the reserved price (Bonn 2010, 72). The bidding process begins and sales are made when a single bidder remains with the willingness to buy the property at his declared price. The agents of Sotheby’s knock down the lot and announce the item has been sold to the highest bidder. The one who wins the lot arranges for private delivery of the product to his premises. Technologically, the company has moved to electronic commerce. All interested buyers of the properties can now look out for what is up by browsing through the e-catalogues of the company. This is in addition to the traditional visitation of the company’s sales exhibitions and purchasing the company’s printed catalogues. Further, the company has adopted the dynamics of technologies to keep its clientele base in constant know how of what goes on. Clients can now register for e-mail alerts and get constantly informed on the on-goings of the company and the products they have on sale. In addition to traditional in-person registration for biddings at the company’s offices, Sotheby’s clients can now register online for bidding and auctioneering services on the company’s website (Association of American Inventors 2012, 32). The company realizes and acknowledges the security challenges associated with conducting full or portion of its businesses online, and insists that all its bidders provide government-issued evidence of identity in addition to banking details where necessary. Once the company approves the registration of a bidder, it has provided for other options of participating in the auctioning process other the traditional requirement to be present at the biding room. Changes in Auctioneering Process Traditionally, all buyers were required to be present at the auction rooms to participate in the auctioneering process; technology embraced by the company has created virtual auctioneering rooms in every client’s residence (Bonn 2010, 72). All are able to participate in the purchase of any item they wish in the comfort of their homes and offices. One places his bids online through LiveBid or BIDnow. These platforms provide one with an opportunity to participate in the auctioning without physical presence. Before the internet provided the company with opportunities to have their clients bid and make purchases online, clients participated in auctions in absentia through telephone bidding (Innovation, Americas Conference on Innovation Systems 2009, 91). Alternatively, one presents an Absentee Bid online. Where one’s bid is successful, Sotheby’s does calculations of sums up the hammer price, local taxes and the buyer’s premium. The winning bidder is contacted and presented with the news. Unlike the traditional ways when the biding price had to be paid via cheques or cash, online business transactions provide the clients to presently use other payment modes including wire transfer and use of credit cards (Association of American Inventors 2012, 32). In the same spirit as in making purchases in Sotheby’s, technological advancements have made a stride in selling processes to the company. In a majority of the cases, the company deals in auctions of second-hand properties. This is in exception of new products, especially real estate. Interested sellers fill out the company’s Auction Estimate Forms (Fredrich 2013, 81). In the form, the prospective sellers provide details of the goods they wish to dispose. In addition to presenting specifications of the items and any information worth noting, the seller attaches the picture of the item and sends it to the company through the website or email. The seller and the company negotiate and settle on terms and conditions of the selling (Carson & Douglas 2001, 83). Once this is done, a contract is entered providing details on the agreed reserved price and the commission the company expects. Failure to fetch the reserved price marks the end of the contract, and the company does not sell the item in the auctions. Impact of Technological Changes to Sotheby’s Company Advancements in technology have no made the business procedures for Sotheby’s and its stakeholders simpler and more convenient. There are several advantages that accrue to the company as a result of the changes in technology that have taken place over the years and the company’s willingness to embrace the changes. Sotheby’s has widened up its clientele base beyond boarders (Jan, Bitho & Bhatti 2012, 05). Although the company operates and has branches in only 40 countries, internet has enabled it to transact business beyond the countries’ boarders. Anyone from around the world has access to the company’s website and can place bids. One can (Association of American Inventors 2012, 32) buy property at any point of the world through the auctioneering services of the company given all the legal procedures of property ownership are adhered to. For objects that are easily mailed to buyer’s addresses such as jewelry, the company can now operate and deal in these products on a worldwide scale. Impact of Technological Changes to Buyers and Sellers Convenience to sellers and buyers is the other reprieve that the company’s willingness to blend in the technological changes has brought forth. According to a research carried out in 2012, 89% of Sotheby’s Company clients are more comfortable doing their bids and auctions from the comforts of their homes and offices (Gee 2013, 49). This is particularly helpful to the clients given the busy schedule most people as they balance the little available time available between career and family life. Changes adopted by the company have greatly improved people’s ability to acquire and dispose property. This convenience has increased consumer confidence in the services provided and increased the company’s income. Financial Policy Changes The move to demand for changes in the operations of the 269 year old auctioning firm stems from pressure of its largest stakeholders. Nelson Peltz and Dan Loeb together with Marcato Capital Management have pressured the company to unlock its value. In a reaction to these CEO Bill Ruprecht reacted by proposing that the company purchases shares, increases dividends, and uses further debts and the value of real estate assets to determine the best return on capital alternatives. According to the VEO, the results of the thorough review and re-assessment of the company’s financial policies and policy allocation is set to take effect in 2014 (Gee 2013, 45). The review of the policies by the company is a logical proactive progression for the company whose shareholders are activists. Changes in design and running of the company as it involves policy matters is set to bring in the effect of contentment in the company. The major shareholders playing activist part in the company does not hold a beautiful position for the future of the company. Despite being disastrous to the internal matters of the company, public discontent of shareholders with performance of the current company policies is detrimental to the image of the company. Sotheby’s stands a chance of locking out all interested investors. Restoration of investor confidence in the old company is important for its continued sustenance and excellence in the industry. Dan Loebs holds 5.7% of the company’s shares, Nelson Peltz olds 3% of the shares while Marcato has a 6.7% stake of the company’s shares (Association of American Inventors 2012, 32). Conclusion From this research, it is evident that Sotheby’s Company has existed over the years because of its ability to embrace worthy changes. Its strengths, weaknesses, opportunities and threats lie in the way it handles the changes that nature present. It keeps a rational balance between the changes it adopts and the fundamental company culture and traditions that define the company. The company has, in particular, achieved its progressive existence through adopting relevant changes in technology and management, especially in the way it handles its shareholders. Although the company understands the effects of too much yielding to activist shareholders, it has provided ways of solving their grievances and creating peaceful operations. Despite the challenges existing in the technological involved in adoption of e-commerce, the company has shown considerable success. Recommendations As Sotheby’s Company keeps progressing to greater heights in providing personalized services to its customers, it is imperative that it explores more options of the changes it could affect. It is impressive enough that the company has managed to survive even in times of world recessions and internal wrangles. For a more stable system that may not see the company’s share ratings and incomes dwindle to the levels observed in November 2013, the company needs to institute permanent and sustainable capital policies to curtail activist activities of the major shareholders. In addition, Sotheby’s Company should have stringent security measures in the provided e-commerce platforms. This is imperative given the sensitivity of the information they receive from their clients. Government-issued identification credentials together with banking details they obtain from their clients can be potentially used for malicious intent if obtained by the wrong people. Therefore, the company needs software frameworks that guard against cybercrimes such as hacking and phishing that come with changes embraced in the technological endeavors. Bibliography Association of American Inventors. (2012). Leadership that Defines Innovation: Analysis of Private Companies in the United States. Management Journal , 98-109. Bonn, S. (2010, June 01). An Ethical Dilemma for Sotheby’s Company. New York, New York, USA. Carson, D. A., Douglas, J. M., & Julius, S. J. (2001). An Introduction to the Innovation Sotheby’s Company. Chicago: Sage. Fredrich, K. (2011). Principles of Sotheby’s Company. Washington DC: Siege Publishers. Gee, P. J. (2013, Dec 21). Literacy, Discourse and Innovation: Sotheby’s Company. New York, New York, USA. Gus, M. (2012). The Significance Changes in Busines (4 edition). Thousand Oaks: Sage Publication. Innovation, Americas Conference on Innovation Systems. (2009). Innovation: Association for Information Systems Year 2009. Dubai: Emirates: Lessons for Evolving Markets. Innovation, Theories of Art, and Sotheby’s Company. (2000, April 28). Innovation, Theories of Art, and Cultural Naratives. Chicago, Chicago, USA. Jan, M., Mitho, K., Bhatti, V., & Ghulam, A. J. (2012, June 21). Theories of Innovation, , Understanding Sotheby’s Company: A Critical Analysis. New York, New York, USA Read More
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