Managing People and Organisations - Bega Cheese - Case Study Example

MANAGING PEOPLE AND ORGANIZATIONS: A case study of Bega Cheese Name Institution Introduction The reality of the business world of today reveals an intensifying competitive trend among various businesses, especially within same industries. Capturing the right and appropriate value from innovation is one of the strategic foundations from which a firm can grow and develop as a business. This was the business design for Bega Cheese Limited, whose reputation in dairy industry has climbed the ladder of the years to a key global player in the scale of selling and supplying the natural as well as processed cheese. The firm’s customers are not only the retail and food service markets in Australia, but also overseas. A critical analysis of Bega Cheese Ltd states that the firm has been acquisitive since 2007 and has been doubling its organization, strategic, design, and expansion development within a timeframe of six years. This paper therefore uses a case study design of Bega Cheese to examine the company’s strategic design and management that has made it so successful within the shortest timeframe. The study also looks into the strategies that managers should take in ensuring the long term survival of an organization, as learnt from the Bega Cheese case study. Analysis of the Organization Design of Bega Cheese Strategic management involves exploiting the available resources of the firm in order to maximize output. Such a coordinative process requires a system that best exploits the organizational exiting advantages. Many firms, both existing and emerging (new) firms, learns and come up with new business strategies that changes the overall market design. Some of these developments that are frequently introduced have their direct linkages to improvements in new products, technologies, patterns of distribution, as well as the business models in play (Chen, & Venkatesh, 2013). It has come to a point whereby a firm cannot boast capital and customers alone, but must also be determined to daily improve its management strategies and designs. The barrier to entry in a market has enormously been broken by technological advancements and thus the rules of engagements of a firm must also change. According to Bhattacharya & Kundu, (2013), the major task of the management of a firm, like Bega Cheese, is to design structure and systems that permit specialization, facilitate coordination of workers through communication, decision making and control, and finally giving incentives to ensure individual and the firm achieve its goals. Thus, organization design remains the goals that translate strategies into reality through structure, process, and procedures. The flexibility of the management structure of Bega Cheese that has remained dynamic for the past six years has made the firm to be adapted to the competitive environment. As explained by the company’s CEO, Coleman, Bega Cheese uses the simplest strategy in business that focuses on discipline especially in cash and capital management. The follow up of the strategy shows, therefore, that the company has a reputable financial statements with strong balance sheets that give Bega Cheese an upper hand to grab opportunities forehand as the arise. Such a strategic position, financially, has made the firm to acquire lots of assets within the six year timeframe, significantly making it to gain a global recognition as the best cheese firm in Australia. Margetts (2007) states that this strategy made Bega Cheese to acquire Tatura Milk Industries as well as other major cheese packaging assets in Australia. Research and Development (R&D) The open-up to the company’s secrets to success leads the study to the company’s investment, thorough investments, in development and innovation. As argued by Meyer (2013), a firm has all the flexibility it deserves only in the event of technological employment to its operations, especially in the management. Arguably, a proper positioning of any firm in the industry, going by the modern business criteria in the world, only comes through better application of the technological advancements in management (Meyer, p16-9). In bid to make its product to satisfy the enormous demand in the world and especially in Australia Bega Cheese has invested an enormous time and money in research and development. In fact, Bega Cheese representative, CEO, stated that Bega Cheese respond to the local market in Australia for new products with the urgency that is required with the demand principles of the market. Through the aspects of market segmentation, the company identifies customer with various specific needs, for instance some customers requiring low salt levels, while others like when other ingredients like oBega-3 fatty acids are added for good health. The regional testes preferences are well served by the firm through research and development. As a major boost, the product development that has been overly geared towards the customer base has made Bega Cheese to influence a strong presence even in the Asia market which has also grown with time. In fact, the company’s involvement in pure science through its contribution to the Dairy innovation Australia consortium shows its involvement and commitments to research and development (Australia Food & Drink Report Q3 2009). Through its involvement in research and development, Bega Cheese has expanded its products range from cheese alone to various specialties of infant formula, nutritional dairy products, milk powders, cheddar, and cream cheese among others. Concerning expansion of product ranges, the company’s CEO argues that Bega Cheese is the largest producer of lactoferrin, a product that minimize infection among infants. The product has also found its roots into the Asian markets, whereby even adults are becoming major customers. Research and development has also made the company to produce surpluses of products every year. Through the processes of automation and mechanization within the mainframes of the company’s factories, product preservations are at higher levels, thereby reducing cases of wastages ((DuBois, & Dubois, 2012)). Basically, research and development is a super strategy that helps the whole industry to advance in its production of quality and completion (Chen, & Venkatesh, 2013). In this case, Bega Cheese works closely with other firms within the industry in order to enhance industrial development technologically. As one of the core strength of the firm, long-term partnership with other companies is a critical management strategy that has positioned the firm in a better position to determine its future competitive stands in terms of the market share and product development. Corporate Values One of the key importances of management design is that it can be used as a management tool that organizes not only people, but also the mainframe organizational structure. Redesigning the management strategies is one of the few tricks that managers can employ in order to exact changes in their firms. With proper corporate values that embraces the spirit of good morals and ethics to the community, a company can have a sustained future growth. This strategy has been the secrets of the Bega Cheese growth. The company has pledged a great commitment to the communal value that extend even to the manufacturing and marketing companies as well as the farmers that supply milk for its productions. In order to ensure a long-term growth and survival, the management must be well acquainted with the nature of the products materials, the suppliers, competitors, as well as the environment. Cheese production combines both farming (agriculture) and management practices. In this case, therefore, a manager must have a strong attachment with the agricultural processes that create raw materials for cheese production. Accordingly, Bega’s Executive Chairman, Barry Irvin, according to Margetts (2007), is a farmer and a businessman. His attachments, and therefore commitments, to the farmers are so strong that he understands the dairy community better than anyone in the firm. Such a strong link to the supplying sector of a firm makes a firm to be able to survive whatever the business environments has to offer in the long term. In fact, according to Trentin, et. al (2012), all major factories of Bega Cheese are based in the rural communities. Through hard work and with good cooperation with the local communities, management can ascertain the firm’s impact to the region. According to the case study of Bega Cheese, Coleman stated that the company has a tight relationship with the farmers and works within its mandates to support them achieve their goals through the farm services team. The relationship extends to creating employment for them and even employing most of them into the Bega Cheese mainframe of operations. By having better relationship, the supply of milk as well as its supply is well managed based on the firm’s specifications and also in control system analyses. Managers must face the market and its environs with open-minded theories that work best not only in the short term, but also in the long term as does the management of Bega Cheese. Environmental Management Before any firm begins operation, and even when in the process of operation, the firm should be careful to do a thorough PESTEL (political, environmental, social, technological, economical, and legal) analysis (DuBois, & Dubois, 2012). A firm that operates well within these factors will not only be successful in the short run, but also in the long run. This argument, as put down by Bhattacharya & Kundu, (2013), means that managers must learn the environment of the firm very well and ensure a appropriate cooperation with the relevant players in the business field. Bega Cheese runs an environmental sustainability program that is aimed at involving the farmers into practices that help conserve the environment, such as regeneration of land, planting of trees among others. Managers must respect the ethical values of the social responsibility of corporate to the society. Businesses cannot operate without the community since the community does not only provide the market, but also supply the necessary raw materials for production in the firm. These are some of the implications for managers in ensuring that the organization survives into the long term. According to Trentin, et al. (2012), an organization strategy must be designed in a manner that reinforces the value of the organization. If the cooperate value of a firm is based on discipline especially in cash and capital management, then the strategy employed must revolve around sustainable revenues for the firm. More importantly, the strategy must be designed to integrate the organizational objectives as well as individual accountabilities that enhance the overall performance of the firm. In working close with its suppliers (farmers) in environmental management, Bega Cheese does not only play its important role of social corporate responsibility (CSR), but also establishing the firm’s directions, businesses, and cultural strategies. One of the theories that are very critical management of an organization is the open system model. The model of an open system correlates effectively with the firm’s association with its surrounding. Basically, an open system theory, according to Hajdul & Nowak, (2014), is a system (a group of parts creating a whole) that interacts with its environment by exchanging energy, materials, and information with an aim of system renewal and growth. Environmental management is one of the many ways in which a firm may create a strong link with the society and thus ensure a continual survival that runs even into the long-term. According to the Congruence Model of Organization, a proper roadmap of better organizational performance is analyzed. The better ideology of this theory an organizational strategy is a factor of environmental, resource and historical inputs. The strategy put together work, people, and organizational goals together in achieving what the system requires, actualizing an individual, and also in the production of output and therefore embraces also the model of an open system model (DuBois, & Dubois, 2012). Bega Cheese has used this strategy to its advantage and has translated the strategy to performance as shown by the company’s success. In such a model, a strategy is designed to look into four basic components; 1. The primary work that is to be done so as to produce the products and services of the firm 2. The workers, people who perform the work 3. The organizational objectives, values, and focus that present the essential structural patterns, processes, as well as the organization of the work flow 4. The behavioral norms and social interaction of the firm and the society (SCR) Bhattacharya & Kundu, (2013) states that organizational performance arrangements can be influence to a great deal through the motivational proponents of the firm’s culture. Through the aspects of motivating behaviors such as goals, rewards, compensations, etc, an organizational strategy is designed to make people work with utmost morale that reflects in the positive overall performance in the firm. Secondly, an organizational strategy can be designed to facilitate behavior by providing a framework of duties and responsibilities like providing methods, procedures, and the necessary information for work. Lastly, it is important for the firm to provide the constraining behavioral strategies such institutional formal procedures, separating groups from each other and such like stuff in order to stay focused on the core objectives of the organization. Bega cheese has consolidated its effort into taking the best out of the community and also producing the best to the community. In the process, the organizational strategies come into their places one by one, and finally causing a positive impact even to the larger society, the world. By also being the largest employer in Bega, the small rural town in the southern coast of New South Wales, have all to respect and thank to the organization. Taking the available local population base, the large population helps to provide skilled labor, market, and also supply. The growth standard of Bega Cheese firm is a reflection of a sustained strategic design that looks into the future with utmost optimism. Through the ranks of surety, the best test of a product market is by actually analyzing the market environment, the products themselves, segmenting the market, and also by investing huge on research and development (Trentin, et. al. 2012). That has always been the secret of the persistence growth of Bega Cheese firm for the past six months. In this case, therefore, it is true that organization design is the strategic vehicle to undertake the work of an organization and ultimately to deliver performance. Conclusion It is important for managers to acknowledge the fact that firms cannot operate on its own and the success of any firm depends on the society. Embracing the spirit of an open system model is very critical in fostering management designs that help achieve the firm’s objectives and values. Bega Cheese limited, through the support of the management that has strong affluent to the open system model, has reaped success and sustained growth for the last six years because of engagement in value creation, involvement of the community, discipline to, especially in cash and capital management. Such organizational designs are very important for the long-term success of any firm. References Australia Food & Drink Report Q3 2009. (2009). Australia Food & Drink Report, 1-95. Bhattacharya, A., & Kundu, A. (2013). Organization Design and Performance: A Study of Selected Indian Organizations in the Liberalized Economy. Global Conference on Business & Finance Proceedings, 8(1), 201-209. Chen, S., & Venkatesh, A. (2013). An investigation of how design-oriented organizations implement design thinking. Journal of Marketing Management, 29(15/16). DuBois, C. Z., & Dubois, D. A. (2012). Strategic HRM as social design for environmental sustainability in organization. Human Resource Management, 51(6), 799-826. doi:10.1002/hrm.21504 Edum-Fotwe, F., Thorpe, A., & Deasley, P. (2009). Design Futures: Pop-I Method for Long-Range Planning of Design Organizations. Journal of Management in Engineering, 25(2), 77-86. Goldkuhl, G., & Perjons, E. (2014). Focus, Goal and Roles in E-Service Design: Five Ideal Types of the Design Process. E-Service Journal, 9(2), 24-45. Gulati, R., Puranam, P., & Tushman, M. (2012). Meta-organization design: Rethinking design in interorganizational and community contexts. Strategic Management Journal, 33(6), 571-586. Hajdul, M., & Nowak, P. (2014). Innovative Approach To Collaboration In Joint Organization Of Transport Processes. Logforum, 10(1), 51-60. Margetts, D. (2007). National Competition Policy and the Australian Dairy Industry. Journal of Australian Political Economy, (60), 98-129. Meyer, A. (2013). Emerging Assumptions about Organization Design, Knowledge and Action. Journal of Organization Design, 2(3), 16-22. Nixon, N. W. (2013). Viewing Ascension Health from a Design Thinking Perspective. Journal of Organization Design, 2(3), 23-28. Novak, V. M. (2014). Design management of sustainability values: a learning organization perspective. Architectural Engineering & Design Management, 10(3/4), 218-232. PR, N. (2012, October 22). Sustainability in the Global Food and Beverage Industry 2012-2013: Trends and Opportunities, Budgets, Food and Beverage Industry Procurement, and Marketing Initiatives. PR Newswire US. Sanchez, R., & Mahoney, J. T. (1996). Modularity, Flexibility, and Knowledge Management in Product and Organization Design. Strategic Management Journal, 1763-76. Schneider, T., & Davis, T. (2010). Fostering a hunger for health: Food and the self in 'The Australian Women's Weekly'. Health Sociology Review, 19(3), 285-303. Trentin, A., Forza, C., & Perin, E. (2012). Organization design strategies for mass customization: an information-processing-view perspective. International Journal Of Production Research, 50(14), 3860-3877. Waitt, G., & Hartig, K. (1997). Grandiose plans, but insignificant outcomes: The development of colonial ports at Twofold Bay,.. Australian Geographer, 28(2), 201. Read More