Business Management at Scruffy Dog Media - Case Study Example

Small business management - the case of Scruffy Dog Media (Cumbria Introduction Despite the fact that the conditions of the international markethave been differentiated the last years supporting and enhancing the development of multinational corporations, small and medium enterprises continue to have a significant importance for national economies worldwide. Current paper refers to the management policies followed by a small business operating in the area of video production, the Scruffy Dog Media, based in Cumbria. Two particular aspects of the firm's activity are examined and evaluating: its leadership and its HR strategies (if any). A brief reference to the theories stated in the literature regarding the above sectors has been considered as necessary in order to understand the operational structure of the firm and to estimate its prospects for the future. 2. Company overview Scruffy Dog Media is based in Cumbria. The firm, in accordance with its official website is characterized as 'a family-owned video production company formed in 2007 to produce high quality video material for companies and organisations in and around the Cumbria area' (firm's website). As noticed above two particular sectors of the firm will be examined: the leadership and the HR management. In accordance with the firm's website the firm operates under the guidance of John Gilluley and Lorna Hardy. Both of them have worked in the area for many years before deciding to form their own firm. It seems that the leadership in the firm has been 'distributed' between these two persons who have equal obligations and rights regarding the firm's administration and profits. No other staff is clearly mentioned in the firm's website and it can be assumed that these two persons do the work themselves or they possible hire staff whenever the needs of a particular project require additional staff. Under these terms, the analysis of the firm's leadership and its HR policies would be based on the role of these two persons in the firm's administration and the appropriateness of their decisions regarding the distribution of tasks in the firm. 3. Leadership and HRM - critical analysis 3.1 Leadership The importance of leadership for the development of any firm around the world cannot be denied. In accordance with Day et al. (1988, 453) 'when several methodological concerns are addressed, it is evident that executive leadership can explain as much as 45% of an organization's performance'. In other words, leadership is considered to have an important role in the firm's performance but it should be rather interpreted as part of the corporate activity, in combination with other characteristics of a firm's operational activities (HR management, operations management, financial management and so on). On the other hand, Hart et al. (1993) highlights the significance of the role of the CEO for the success of any corporate initiatives. More specifically, the above researcher supports that 'CEOs with high "behavioral complexity" - the ability to play multiple, competing roles - produce the best firm performance, particularly with respect to business performance (growth and innovation) and organizational (stakeholder) effectiveness; executive leadership role had little to do with firms' financial performance' (Hart et al., 1993, 543). In the case of small firms, where there is no CEO the above assumptions can be used only in order to evaluate the role of the firms' director(s), i.e. of the persons that have the responsibility for the design and the completion of any firm's activity. In this context, although there is no CEO having the supervision of all plans and initiatives, the responsibility of the directors is not limited but it is equally distributed among them. In the particular firm there is no reference to the firm's staff - apart from its directors. For this reason, only assumptions can be made regarding the HR policies applied by the firm. At a first level, it could be assumed that in any case that a project is too complex, the firm's directors use additional staff (either outsourcing or within the firm) in order to meet the requirements of the specific project. In this context, the cooperation between the directors and the staff should be promoted in order for the completion of the project to be better (and faster) supported. However, in this case directors should be able to administer the work of the staff successfully, i.e. they should be able to participate actively and administer a group of persons in order to complete a specific task (project). The specific issue has been examined by O'Connell et al. (2002, 50); their study showed that 'team leadership, was related to the managers' ratings of quality and overall performance for smaller teams, but not for larger teams; the managers' ratings of team performance were not significantly correlated with ratings of team performance obtained from the team members' (O'Connell et al., 2002, 50). In other words, the administration of a team is crucial for its performance. Towards this direction, Gabrielsson (2007, 511) found that 'a strong and vigilant board can have a significant influence on the value-creating potential of medium-size companies; yet, how best to conceptualize this relationship remains controversial'. The relationship between the leadership and the performance of employees is extensively proved in the literature and the empirical research. The results although present slight differentiations - because of the differences in the corporate structure, objectives and market conditions - prove that proactive communication between the firm's leaders and its employees can support the financial development of the firm both in the short and the long term. In fact, in a study made by Madlock (2008, 61) in which about 220 individuals participated (workers of firms in Midwest) it was revealed that there is 'a strong relationship between supervisors' communicator competence and their task and relational leadership styles, with supervisor communicator competence being a stronger predictor of employee job and communication satisfaction' (Madlock, 2008, 61). In the case of the specific firm, the communication and the cooperation between the firm's directors and its employees cannot be evaluated because existed data do not offer information on the workplace - apart from info on the directors' skills and their role in the firm. Under these terms, it could be assumed - as noticed above - that the two partners hire additional staff whenever this is required; for this reason their communication with the employees could be evaluated only under this condition (i.e. referring to a specific project where the participation of additional staff was considered as necessary). However, because no available information exists on this issue, the role of leadership in the specific firm could be characterized as significant (as in any firm globally) while the communication of its directors-partners with the staff would be assumed to be proactive and satisfactory taking into account the firm's performance since its establishment (which, actually, is recent). 3.2 HRM The importance of HR management for the development of business activities has been extensively highlighted in the literature. In this context, it is noticed by Lawler et al. (2003, 24) that 'the knowledge economy, with the proliferation of companies that rely on knowledge-based competitive strategies, offers an opportunity for HR departments to alter their role in the corporation fundamentally and become true value-adding strategic partners'. On the other hand, it is mentioned by Haines (1997, 95) that many firms around the world 'view their human resources as an expense rather than an asset -- an element that is expendable and perhaps discarded when the skills possessed becomes obsolete'. Because of this fact, the development of a firm's HR policies is often viewed as an activity that would cause delays in the firm's development because of the potential costs related with the design, the implementation and the supervision of appropriate HR policies in a specific firm. For this reason, it is a common practice that no particular initiative is taken regarding the development of a firm's HR strategies until this initiative is made obligatory by the circumstances (radical decrease of the firm's performance); instead various measures are implemented in order to enhance existing HR policies avoiding additional costs for the restructuring of the HR scheme applied on a particular organization. However, even when the development of HR policies is adequately promoted (using relevant schemes of action and paying all necessary costs) it is possible that the results will not be the expected ones (referring to the increase of the employees' performance and the enhancement of the firm's profitability). Indeed, the study of Conner et al. (1996, 38) showed that 'to improve its effectiveness and have greater impact, the human resource function must understand how to add value in the organization by helping line managers align HR strategies, processes, and practices with business needs; this will require HR professionals to perform increasingly complex and at times paradoxical roles'. In accordance with the above in order for the HR management to effectively support organizational performance it should be appropriately structured and monitored constantly as of all its aspects. In this context, the role of the firm's leaders and particularly of its HR practitioners is considered to be of significant importance. In fact, the various aspects of HR management should be given equal attention when the development of the firm's performance in the short term is the required target. Diversity is viewed one of the most important aspects of the HR management within modern corporations. The importance of diversity for modern firms is derived from the fact that the specific aspect of HR management can refer to many issues: gender, race, age, physical ability which should all be addressed carefully when designing and implementing a particular HR strategy. In this context, Karp et al. (2000, 451) noticed that 'diversity is one of the greatest concern and one of the top ten legal issues that face HR professionals today'. Other potential forms of equality (as related with diversity) in the workplace would be also evaluated when designing and implementing HR policies in firms worldwide. Regarding this issue, it is supported by Watanabe (2000) that the HR scheme that would be most appropriate for modern organizations is the one with the following characteristics: 'a stable income base is provided with more equal and annually increasing monthly wages, while competitive incentives for better performance are offered in the form of more drastically varied biannual bonuses' (Watanabe, 2000, 321). In any case, the culture of the firm as well as the culture of the society in which a firm operates should be taken into consideration when designing and implementing a specific HR policy. Regarding this issue it is noticed by Soutar et al. (1999, 203) that 'culture is an important idea as it deals with the way people live and approach problem solving in a social and organizational context'. All the above issues should be taken into consideration by modern firms when designing and 'adjusting' their HR strategy. In the case of the specific firm where no reference to its staff is made (as already explained above) it could be noticed that all the assumptions and the findings presented in current section would be valuable when designing its HR policy and when regulating the relationships between the employers and the employees (even under a temporary or part-time scheme of work as explained already). 4. Prospects for the future UK market is considered to be an extremely proactive one regarding the commercial activities of firms of all types. Regarding the communication schemes used by firms in Britain, the study of Cornelissen J.P. and Thorpe R. (2001, 413) led to the conclusion that 'the importance of the organizational relationships and processes between departments within communication organization cannot be doubted'. On the other hand, because of the strong competition the survival of the firms in the specific market is considered to be a challenging task. In fact the existence of a firm for a long time within the British market can be achieved only under certain conditions: a) all the appropriate measures are taken in advance in order to ensure the effectiveness of the plans applied throughout the organization (HR, daily operations and so on); b) the communication within the firm is appropriately enhanced and promoted; c) the firm would update its technology in accordance with its competitors trying to strengthen its position in the market and d) the firm would seek for strategic alliances especially if the power of its competitors seems to be increased. If the specific firm applies all the above policies it would be expected that its position in the market would be stabilized in the long term. However, because it is a small size firm, the competition should be handled using different techniques. In fact, the specific firm seems to be depended on its market (referring to the specific region) in order to survive. Currently, this is a viable strategy; however in the long term the survival of the firm would be under risk if strong competitors would appear in the region. Perhaps for this instance there are no major competitors in the particular market and for this reason the directors of the firm follow the particular strategy: limited employees (in fact basically the two partners); outsourcing when necessary and avoid the expansion before the achievement of a stable position within the local market. 5. Conclusion Small and medium size firms have a significant importance for the development of local economies (referring to the economy of particular regions). However, they should follow all appropriate guidelines regarding the development of their activities in accordance with the demands of the modern market. The role of leadership and human resources management has been found to be of equal importance for SMEs as in large corporations. In this context, it is noticed by Ashforth (1995, 97) that : 'Leaders may persuade with logic, but they motivate through emotion; leaders must come to grips with the challenges of emotion, a key driver of productivity, quality and other factors that lead to business success'. The above researcher refers especially to the importance of leadership for the development of business activities. However, all aspects of organizational context should be reviewed in order to design the appropriate schemes of action when the promotion of organizational performance is set as a target. Regarding this issue, it is noticed by Sims (2002, 165) that 'organizations today are increasingly recognizing the importance of developing their human resources'. On the other hand, Clemons et al. (2004, 39) supported that 'for many employers there is a serious gap in their employment training programs'. Both the above researchers highlight the importance of HR for the improvement of organizational performance. However, the HR policies applied on SMEs would be differentiated in accordance with the firms' structure, their financial strength (it would specify the ability of the firm to respond to the cost of a particular management scheme or other similar initiative) and their position in the market. The targets set by the firms' owners should be also taken into consideration. More specifically, because the expansion is not always the required target, the development of firms' activities could be decided on a series of issues including the potential prospects for the firm in the future (as these prospects could be assumed based on the current performance of the firm within its market). Another issue that was extensively highlighted in current paper is the fact that the development of organizational activities is depended on the relevant decision of the firm's directors - owners (referring to small and medium enterprises) who are going to decide on the appropriate scheme of action. In this context, it is supported by Hopkins et al. (1994, 433) that 'personnel directors, more than anyone else in organizations, are in a position to know what is needed to facilitate the transition to a more highly diverse work force'. In fact, all activities of SMEs are reviewed by their owners - directors who also decide on the appropriateness of any suggested plan regarding the various parts of organizational operation. On the other hand, the importance of two specific sectors, the leadership and the HR management for the organizational performance, has been extensively proved in this paper. Potential differentiation in the methods followed for the development of these two sectors within each particular organization can be explained by the intervention of a series of factors - that can influence organizational performance at a significant level. For this reason, it is supported by Schuler et al. (1998, 159) that the effectiveness of HR polices applied on a particular organization can be depended on the following issues: 'a) the business structure, b) the legislative and employment relationship context, c) the patterns of HRM competence and decision-making and d) the national culture'. On the other hand Coleman (1994, 13) noticed that within any business environment 'all players must understand how their personal contributions to work goals will influence the success of the organization'. In other words, the development of organizational activities cannot be achieved without the active involvement of the firm's owners or else its leaders. The latter would have the responsibility for the effective application and development of all policies applied on the organization (including the HR schemes). However, in order for the organizational performance to be appropriately supported, the firm's leaders should have a series of qualities (skills) as described above. In the firm under examination the structure of the leadership supports the development of any initiative within a relatively short time (there are only 2 persons - the owners - that would have to review the specific initiative) but the successful completion of the particular initiative should be appropriately reviewed in accordance with the firm's financial potential and its prospects for the future (as set and targeted partially by its owners). The role of leadership and HR in the specific firm would be expected to be significant (as for all modern firms in the context already described above); however additional measures should be taken by its owners in order to align current business strategies with the demands of the consumers in the local market and the potentials of this market for its future (referring to the development of organizational activities in the long term). References Ashforth B. E. (1995). Emotion in the workplace: A reappraisal. Human Relations 48(2): 97 Clemons, L., Mdaughlin, J. (2004). 'Diversity Training: The Often-Forgotten but Necessary Ingredient of Any Employment Training Program' Public Management 86(5): 32-47 Conner, J., Ulrich, D. (1996). Human Resource Roles: Creating Value, Not Rhetoric. Human Resource Planning, 19(3):38-46 Day, D., Lord, R. (1988) Executive Leadership and Organizational Performance: Suggestions for a New Theory and Methodology. Journal of Management, 14(3): 453-464 Gabrielsson, J. (2007) Boards of Directors and Entrepreneurial Posture in Medium-size Companies. International Small Business Journal, 25(5): 511-537 Hart, S., Quinn, R. (1993) Roles Executives Play: CEOs, Behavioral Complexity, and Firm Performance. Human Relations, 46(5): 543-574 Hopkins, S., Hopkins, W., Sterkel-Powell, K. (1994). 'Training Priorities for a Diverse Work Force' Public Personnel Management 23(3): 429-434 Karp, H., Sammour, H. (2000). 'Workforce Diversity: Choices in Diversity Training Programs & Dealing with Resistance to Diversity' College Student Journal 34(3): 451-467 Lawler, E.E., Mohrman, S.A. 2003. HR as a Strategic Partner: What Does It Take to Make It Happen' Human Resource Planning, 26(3): 15-31 Madlock, P. (2008) The Link Between Leadership Style, Communicator Competence, and Employee Satisfaction. Journal of Business Communication, 45(1): 61-78 O'Connell, M., Doverspike, D. (2002) Leadership and Semiautonomous Work Team Performance. Group and Organization Management, 27(1): 50-65 Sims, R. Organizational Success through Effective Human Resources Management. Quorum Books. Westport, CT. Publication Year: 2002. Page Number: 165 Soutar, G.N., Grainger, R., Hedges, P. (1999) 'Australian and Japanese value stereotypes: a two country study' Journal of International Business Studies, 30(1): 203-211 Watanabe, S. (2000) 'The Japan Model and the future of employment and wage systems', International Labour Review, 139(3): 307-325 http://www.scruffydogmedia.com/ Read More