The Management of the Fitness Forever Organization - Case Study Example

Question No. 01 The Fitness Forever has been vulnerable to different threats and challenges, which has emerged due to the competitive business standards. The record of the Fitness Forever has exhibited the lackluster financial performance of organization, soon after the convergence of the authority was permitted. The practices of the Fitness Forever has been criticized much because the organization has increased the prices i.e. fees and interest rates charged, particularly when the declination in the revenues was imminent. The financial institution was heavily criticized and disliked by the local market because of the expected reduction in the interest rates, when the declination of the deposits and advances was observed. Furthermore, the decision by the Sentinel institute to explore the opportunities in small towns and sub-urban areas demoralized the spirit of the Fitness Forever. The Sentinel intended to launch its activities in Fitness Forever region in an aggressive manner, and further intended to ensure that the expansion phase is implemented soon after the official opening of their first branch in the region. Sentinel has relative stable edge over Fitness Forever, the former is renowned 'for its strong sales culture', which has motivated the consumers towards the Sentinel. The Sentinel on its behalf has been successful in the exploration and the efficient utilization of the available opportunities. The management of the Fitness Forever organization was of the opinion that 'the Fitness Forever's traditions of personal service could ride out any waves made by Sentinel', the element of over-confidence led to the least preparation on the behalf of the Fitness Forever organization which brought unexpected and catastrophic revealing for the institution. It was observed, and complained that the staff of the organization were neither helpful nor polite towards their customers, and were strange and least informed about the products and services launched and offered by the institution for the purpose of value addition. It was further observed that Sentinel was fully prepared and planned to 'flex its considerable muscle in Waterston'. In this regard, the institution announced its plan to inaugurate more than two branches in the Fitness Forever area, at parallel; the institution took 'very aggressive moves in pricing its checking and savings accounts'. The Fitness Forever was not prepared to tackle the result oriented techniques and methodologies of the Sentinel, and popular and prominent aspect of the Sentinel's sales culture was ignored and avoided. The ordeal placed the Fitness Forever in challenging position, and level of anxiety among the management of the Fitness Forever institute was visible gradually. The Fitness Forever was vulnerable towards two different threats i.e. Sentinel emergence in the region, and the leadership complacency issue, relevant to the management of the Fitness Forever. The employees of the Fitness Forever have expressed their ignorance towards the techniques commonly adopted in the practices, and have further expressed their inability to sale the products in the market. The employees have expressed their reluctant towards the learning of the sales practices, and belief that their profession doesn't require them to be 'pushy salesman', the concept of sales is void and misinterpreted. It has been learnt that the branch officers have complained about the lack of coordination and cooperation from the operations group. The lack of friendliness and teamwork has demoralized the employees, and operation group has been criticized for its 'rigid adherence to obscure procedures, and lack of sensitivity towards the needs and requirements of the branch officers and local employees' (David, 2006). The branch managers revealed that the sales efforts have been hampered by the requirement of the documentation in an excessive manner. The behavior and the conduct of the employees have been criticized by the customers, 'tellers are fine but the higher you go, the worse the service'. The customers have registered several complains related to the irresponsible attitude, and non-responsive approach of the employees. The customers agreed to the common employees i.e. 'never return the calls when voice mail messages are dropped', 'always get voice mail when information is dialed', 'employees have a bad attitude when the customer service is approach for the balance inquiry', the employees are humble and cooperative but they are least informed and updated about the policies and schemes of the institute'. The customer complained of the hospitable attitude lacked by the officers, and it was observed that the customers on different occasions were neither entertained nor facilitated by the officers. Question No. 02 The Corporate Diversification has been discussed in detail by the financial economists, the analysts are of the opinion that corporate diversification has lesser degree of favorable impact in judging the benefits of diversification for different reasons. The primary reason is that 'any diversification possibilities that corporations might have, will, in a perfect capital market, already have been exhausted through shareholders' individual portfolio choices' (Yang, 2005). The secondary reason is that the diversification discount i.e. the diversified corporations have the privilege to trade at discounted rates as compare to their non-diversified counterparts. It has been therefore concluded that corporate diversification is neutral, but has the potential to damage strategy. Surprisingly, the corporate diversification has been strong practice, 'At face value, diversification can be explained by the fact that when pooling income streams that are less than perfectly positively correlated, the resulting income stream is less volatile than were the constituent income streams' (Yang, 2005). The dilution of the risk factor therefore has the potential to be beneficial. The critics of the corporate diversification are of the opinion that any reduction that can be achieved through diversification, by any of the firm, 'can be replicated by the individual shareholders through an appropriately chosen portfolio'. The shareholders are expected to achieve more through cheap and economical diversification, as compare to the firm. It is believed that diversification reduced the exposure of the shareholders towards risk, therefore diversification is beneficial for the shareholders, 'the view of diversification as a means to decrease the exposure to the risk of shareholders is unnecessarily narrow in that corporate diversification and the resulting decrease in risk factor could increase the combined entity's debt capacity' (Montgomery, 1994). The major concern towards the debt capacity motive has been that it has suffered from drawbacks of the similar nature based on pure risk reduction motive. However, in perfectly functioning capital markets, the access to the credit for the firms is constrained and limited by the value of the project, therefore 'under the same conditions where the diversification neutrality result has bite, increasing debt capacity through diversification should not be a concern in the first place' (Yang, 2005). The important feature of the alliance and acquisition features has been its resemblance with the business cycle; the alliance and acquisition activities are positively related to the industrial output, business incorporations and further based on the reduction in interest rates. It has been examined that alliance activity is positively related to easing of financing constraints. The increase in the alliance activity is also based on the increase in the in collateral values (Schelling, 2000). Economists have proposed that reorganization possibilities due to the advent of technology have created focus of the corporate towards alliance and acquisition of corporate. Furthermore, overvaluation is also responsible for the increase in the alliance activity. In certain cases the economy which has poorly capitalized firms, seek assistance through financial intermediaries to that funds for particular project can be increased. The alliance or acquisition of unrelated firm is also expected to boost the debt capacity of the corporate. 'This means that the equilibrium extent of alliance activity is a function of the amount of funds available from financial intermediaries. In equilibrium, when intermediary capital is plentiful, more firms will become active in the economy, many of them becoming so by forming conglomerates' (Montgomery, 1994). Question No. 03 The implementation of the Enterprise Resource Planning system in Fitness Forever has been positive measure, which has organized the inventory, and successful in the identification of the requirements of the individual factory. The system further ensures that the medium of communication exist between the units of the factory so that the redistribution off the components is achievable, which correspondingly 'serve the overall enterprise' (Thomas, 2002). The Material Requirements Planning system require that the corresponding system are intact, effective and efficient, the system is expected to result in failure if it handles the variety reduction and engineering in a manner through which the availability of the product can be ensured. The push system is considered to be the system which is based on factors of demands i.e. Customer Orders within the present and future scope. As per the system, the demand factor is taken into account on the basis of which the material and capacity planning is conducted. The Material Requirements Planning is based upon similar methodology, in which parallel systems i.e. JIT, Kanban are exercised. The Pull system is based upon the philosophy of Made to Order situation, where the flow of the material is in reverse direction relative to the flow of the documents and other formalities. The real demand i.e. the received orders are taken into account in this system, whereas the Material Requirements Planning system is based upon the concept of expected orders (Doug, 2006). Enterprise Resource Planning system requires a system based on coding parts which is expected to determine the tracking and requirement analysis. The products are booked into and out of the yard in a more regular manner; the Enterprise Resource Planning system has catch-up with the pace of such modifications. Integration of resources and features is the highlight of the Enterprise Resource Planning, the major objective of which is to "integrate data and processes from all areas of an organization and unify it for easy access and work flow" (Doug, 2006). The advantage of the system has been the creation of the single database which shall be significant in the accomplishment of the integration of resources and information, the system "employs multiple software modules providing different areas of an organization with various business functions" (Doug, 2006). It has been observed that the categorization of the organizational, departmental and employee values and behaviors on the basis of the professional affinity and compatibility has generated satisfaction among the employees, and has developed positive impact on their 'commitment, absenteeism, turnover, morale and perception of feeling involved in an organization's decision-making process'. Enterprise Resource Planning (ERP) is regarded as the multi-module, integrated computer system which helps in the attainment of the 'common business processes, common information access, allocation of the global resources and its utilization'. The company has installed the SAP system, which focuses upon Systems, Applications, and Products, and software has been installed as software engine which is compatible with ERP. The common business processes shall be incorporated and achievable through the installation of the ERP compatible system, it has been researched that the 'functional areas migrating to SAP will include order management, manufacturing, engineering/project management, sourcing and finance' which shall enhance the professional capacity of the management system. Question No. 04 It is important to focus upon the significance of the Customer Relationship Management, and will try to ensure that the implementation of such system will be responsible for the efficient and effective performance of the company. It is important for the employees to realize that the Customer Relationship Management supported the management and the customer service staffs in addressing the concerns and issues of the customers in comprehensive, convincing and successful manner. The employees of my company will be introduced to the salient features of the product, and discussion shall converge on the convincing note that the software will further assist towards the professional responsibilities of the company. From the executive perspective, it is important to ensure that the employees are willing to accept and practice the new system, because at the end of the day it will be my employees who will conduct the job activities, under my supervision. I will personally try to explore possible dimensions so as to make the employees realize of the fact that the Customer Relationship Management is not additional responsibility, but rather it is necessity which will reduce the average work load, and will amplify the magnitude of efforts invested by the employees. The Customer Relationship Management is responsible for the profitability, the financial earnings of different companies have reported magnificent surge soon after the adoption of the Customer Relationship Management software, therefore the employees will be referred to the practical and professional cases, and the procurement and implementation of the Customer Relationship Management software will be justified. The interests of the employees shall be achieved by promising them financial perks provided that the speculations related to the success of the Customer Relationship Management software is authenticated, however it will be cleared that the promise is subjected to the coordination, hard-work and professional attitude of the employees towards their respective assignments, such profitability is in lieu with the desired objectives towards expansion of Fitness Forever. The Customer Relationship Management systems are of significance and vital assistance, the software offers compilation and availability of the crucial and significant data i.e. customer satisfaction and efficiency of service. The employees will be realized that the accountability process conducted through CRM is justified and flawless, therefore a comparative analysis will be exercise to make the employees realize of the guaranteed confirmation of their success and reward through the accountability tools of the Customer Relationship Management, which was previously not practiced in the company. Above all the Customer Relationship Management software operates on the basis of qualitative standards, and the implementation of the system will curtail the number of such incidents where the hard-work and struggle of the employees was not utilized only because it was miscalculated and not required, the proposed software is capable of identifying the application and scope of the ideas, and will help in the release of the advertisements and marketing campaigns which are target cum market oriented. It is also important for the employees to know that the software is able to generate the required reports aimed at the assessment of the product development and new concepts, the exercise was previously difficult to comprehend and its practice was generally avoided. The future course of action can be decided upon through this software, which will broaden the scope of activities, and will assure the high probability of success, and secure the future and expansion of Fitness Forever. Question No. 05 Revenue 882750 Expenses Rates & Insurance 130000 Fuel & Power 505000 Repairs & Maintenance 37500 Chemicals 18000 Security 25500 Cleaning Materials 12500 Salaries 260000 Salary Related Cost 64375 Depreciation 20000 Snack Bar Supplies 52500 Licensed bar Supplies 42000 Head Officer Overhead 78000 814963 67787 References 1. Diochon MC. (1997) Entrepreneurship and Community Economic Development: Exploring the Link. PhD Thesis, University of Durham England. 2. Yeung, Tung. Achieving Business Succession in Confucian Societies: The Importance of Guanxi (Connections). Organizational Dynamics 1996;Autumn:54-65. 3. Gibb AA. Corporate Restructuring and Entrepreneurship: What can Large Organizations learn from Small Enterprise and Innovation Management Studies 2000; 1(1): 19-35. 4. North DC. Institutions, Institutional change and Economic performance. Cambridge University Press. 1990. 5. Gibb. Small and Medium Enterprise Development; Borrowing from Elsewhere A Research and Development Agenda. Journal of Small Business and Enterprise Development. 2000. Pp. 189-209. 6. Montgomery, C. A. Corporate Diversification. Journal of Economic Perspectives. 1994. pp. 165 7. Tirole, J. The Theory of Corporate Finance. Princeton University Press. 2005 8. Yang, L. What Has Motivated Diversification: Evidence from Corporate Governance 2005. 9. Uner Kirdar and Leonard Silk. People: From Impoverishment to Empowerment. Oxford University Press. 1995. 10. Inge Kaul, Isabelle Gruenberg, and Marc A. Stern, Global Public Goods: International Cooperation in the 21st Century. Oxford University Press. 1999. 11. Karl Polanyi. The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press. 1999. Read More