Stobart Group - Term Paper Example

Stobart Group Table of Contents Introduction 2. Stobart Group – Overview 2a. Ownership 2b. Size 2c. Structure of the organization 2d. Organizational culture 3. Effects of current economic climate on the profile and culture of Stobart Group 4. Conclusion References Bibliography 1. Introduction One of the key challenges of organizations in modern market is to secure their position in their industry; under the influence of globalization, competition in all industrial sectors has been increased; firms, which tend to continuously update their strategies in order to meet the market trends, are more capable to compete their rivals. Current paper focuses on the examination of the structure and culture of a well-known British firm, Stobard Group; the firm’s position in the logistics industry of UK is significant; the continuous increase of the firm’s profitability helped to the expansion of the organizational activities worldwide; currently, the firm’s sites operate in Britain, Ireland and Continental Europe. In 2009 the firm’s revenues were estimated to 447,661 (million pounds); in 2008 the revenues of the firm reached the 431, 062 (million pounds). The growth of the firm has led to its listing in ‘FTSE 250 and FTSE All Share indices’ (Stobard Group, Investors, Listing Information). A key point in the firm’s growth seems to be its acquisition by WA Developments International (in 2004); the firm’s new owners introduced important changes in the firm’s culture leading the organization to become one of the most powerful players in the British logistics industry. 2. Stobart Group – Overview Stobard Group is among the UK’s major competitors in the logistics industry; the firm was first established in 1970; today, the firm’s sites in Britain, Europe and Ireland are estimated to 40 (corporate website, 2010); through the decades, the firm’s structure has been changed being aligned with the increased organizational needs – the expansion of the firm’s sites within and outside Britain led to the need for changes in organizational size and structure; the organizational culture can be characterized as stable; interventions have been made aiming to increase the firm’s competitiveness in its industry. 2a. Ownership The firm started as a family business – in 1960; in 1970 Eddie Stobart Limited was established under the control of Eddie and Edward Stobart; it was in 2004 that the firm’s ownership changed drastically; the firm was acquired by WA Developments International – a firm ‘owned by Andrew Tinkler and William Stobart’ (Stobart Group, History); up today the firm is under the control of A. Tinkler and W.Stobart who have introduced significant changes in organizational structure and culture – a fact that also positively affected the firm’s position in its industry. 2b. Size As noted above, the firm was first established as a family business; due to its performance its size was rapidly increased; between the 1970s and the 1990s the firm’s depots were expanded across Britain; the update of the firm’s IT infrastructure and the development of a series of mergers and acquisitions led to the expansion of the business activities outside Britain – including Ireland and Continental Europe; in fact, in 2010 the firm’s sites in Britain, Ireland and Continental Europe have been estimated to 40. 2c. Structure of the organization The structure of the organization has been changed gradually been aligned with the changes in its ownership; another factor that influenced the organizational structure has been its merge with Westbury Property Fund Limited – in 2007; the acquisition by the firm of the OConnor Ports business – in 2007, of the WA Developments – in 2008, James Irlam Logistics – in 2008 and of the London Southend Airport in 2008 (Stobart Group, History). The change in the firm’s structure has been reflected in the differentiation of the organizational activities; more specifically, the firm in its initial form (as a personal business, in 1960s before its incorporation) focused on agricultural contracting; it was in 1970 – incorporation of Eddie Stobart Limited – that the firm started its operation in road transport and warehousing industry; in 2006 the firm launched a ‘Rail freight service’ scheme (Stobart Group, History); through the years other operational activities were incorporated in the firm’s daily operations – for example, the ‘railhead and container hadnling facility’ (Stobart Group, History) – in 2007 and the ‘fresh and chilled food trasport’ (Stobart Group, History) – in 2008. Under the above changes, the firm’s culture had also to be alternated meeting the new organizational needs; the key elements of this transformation are explained in the section that follow – relevant literature is also used in order to show whether the changes in the culture of Stobart Group were appropriate – in terms of the firm’s goals and structure – and whether they performed at the level expected by their initiators. 2d. Organizational culture The update of organizational culture can result to significant benefits for modern organizations; in fact, the introduction of changes in regard to a firm’s culture is related with the improvement of the organizational performance but only under the terms that the relevant procedure is appropriately prepared and carefully monitored. In the literature, in practice, researchers have used different criteria during the evaluation of culture as part of the organizational entity. In accordance with Zachary (2005, p.5) the development of a mentoring culture should be one of the priorities of organizations in all industrial sectors; the above view is justified by referring to the value of mentoring culture for the improvement of organizational performance; more specifically, it is noted that through the mentoring culture the organization can achieve the following targets: increase learning in all its sectors and make a more efficient use of time and resources required for the development of the organizational operations (Zachary, 2005, p.5); as for the framework of the mentoring culture, the following description is given: ‘mentoring requires a culture to support its implementation and fully integrate it into the organization’ (Zachary, 2005, p.7). On the other hand, Nicotera et al. (2003) note that culture can influence the organizational structure and the organizational norms (Nicotera et al., 2003, p.2); this assumption is based – in accordance with Nicotera et al. (2003) – on the fact that people are likely to react differently within different organizational environments as ‘they perceive differently’ (Nicotera et al., 2003, p.2) – meaning that their behaviour can be adapted to specific norms – as parts of a particular organizational environment; if these people enter a different organizational environment, then they will have problem to align their behaviour to the new culture – at least for a specific period; this view is valuable in order to explain the potential response of employees to changes introduced in their organizations regarding the organizational culture. On the other hand, culture is closely related with the organizational performance – for this reason, the organizational values and practices – as elements of the organizational culture – need to be carefully reviewed and monitored being continuously aligned with the organizational goals (Fairfield-Sonn, 2001, p.43, Schein, 2004, p.7); the effect of culture on organizational performance can appear either in the short or the long term (Miner, 2007, p.220). In order for organizational culture to support the development of organizational performance it needs to be initiated ‘by people who bring a lifetime of cultural experience with them’ (Pauleen, 2007, p.178); another requirement of a successful organizational culture is to be aligned with the existing social ethics and morals (Feldman, 2002, p.5). On the other hand, the organizational culture which is ‘shared from one generation to the next’ (Bass, 1998, p.62) has more chance to survive and thrive – attempts to establish cultural principles which have not been carefully planned and monitored are likely to fail. In Stobart Group, culture has been related with different priorities – following the changes in the organizational ownership; up to 2004 the firm focused on expansion based on traditional techniques and strategic approaches; after the acquisition of the firm by WA Developments International, in 2004, a series of changes were introduced in organizational culture; emphasis was given to ‘the core values and profitability, the improvement of environmental awareness and the introduction of a revolutionary new costing model’ (Stobart Group, History); these changes support more effectively the goals set by the firm’s new owners – in the context of the view of Fairfield-Sonn, 2001, presented above; moreover, the changes on organizational culture were necessary since the organizational structure was going to be radically changed (Nicotera et al., 2003, as analyzed above); the new culture could lead to the more effective use of organizational resources – as also suggested by Zachary (2005). At the same time, the new values of the organizational culture would better support the firm’s expansion – an approach also known as organizational development (Daft, 2009, p.432). 3. Effects of current economic climate on the profile and culture of Stobart Group The global recession has led organizations worldwide to change their strategic priorities; organizational plans have been also alternated ensuring the limitation of risk involved in various organizational activities. The effects of the financial crisis on certain firms have been severe leading to solutions such as mergers with other organizations. Stobart Group has been an organization on which different strategic plans have been applied; in 2004, the initial firm, Eddie Stobart Limited was acquired by WA Developments International; in the years that followed, the firm acquired other firms – as described above; in other words, it seems that the firms owners – both the current and the previous ones - did not hesitate to take the measures required – aiming to protect the firm’s survival in its industry. In the context of current financial crisis, a similar approach will be developed. Currently, the firm’s activities have not been particularly affected – up to now – by the global recession; however, if such an issue would appear then the following changes should be made on organizational culture and profile: the continuation of the firm’s operations should be the priority – instead of expansion in new markets; therefore, the activities of the firm would have to be reduced trying to reduce the firm’s operational needs/ cost. In the same context, stability would have to replace profitability and the environmental awareness should be reduced – cost effective techniques would be preferred by those operational techniques which may support the environment but their cost would cause severe pressures on the firm’s financial status. 4. Conclusion During recessions, the survival of firms in various industries is depended on the ability of their leaders to take the measures required for securing the organizational performance; often, the expansion globally is used as a strategic tool for protecting a firm’s profitability – increasing the chances of the firm to remain competitive within its industry. In Stobart Group, the changes in organizational culture have been related with the alterations in the organizational ownership – which also led to the differentiation of the organizational structure; through these changes, the role of the culture in the organization’s strategic planning has been increased; core values has become the basis for the development and the evaluation of organizational activities. The improvement in the firm’s performance – as indicated through its listing in the FSE 250 – proves that the attempted changes on organizational culture were totally justified; further changes on organizational culture could also initiated – using similar criteria and principles. In regard to the viability of the changes attempted in organizational culture it can be noted that these changes cannot be characterized as emergent – in other words, in the time of the development of these changes the firm’s traditional culture did not fail – at least not fully – to meet its targets. In fact, the pre-existed culture ensured the survival of the firm through the decades; in other words, the firm’s initial culture had been tested and proved to be efficient; the change in the market characteristics and the increase of competition imposed the need for changes on the firm’s culture. However, the firm’s new culture needs to be tested in practice; the viability of the firm’s structure will be also highly depended on the level of efficiency of organizational culture. References Bass, B. (1998) Transformational leadership: industrial, military, and educational impact. Routledge Daft, R. (2009) Organization Theory and Design. Cengage Learning Fairfield-Sonn, J. (2001) Corporate culture and the quality organization. Greenwood Publishing Group Feldman, P. (2002) Memory as a moral decisión: the role of ethics in organizational culture. Transaction Publishers Miner, J. (2007) Organizational behavior: From theory to practice. M.E. Sharpe Nicotera, A., Clinkscales, M., Walker, F. (2003) Understanding organizations through culture and structure: relational and other lessons from the African-American organization. Routledge Pauleen, D. (2007) Cross-cultural perspectives on knowledge management. Libraries Unlimited Schein, E. (2004) Organizational culture and leadership. John Wiley and Sons, 2004 Zachary, L. (2005) Creating a mentoring culture: the organizations guide. John Wiley and Sons Online Sources Stobart Group, 2010, available from http://www.stobartgroup.co.uk/ Bibliography Cameron, K., Quinn, R. (2006) Diagnosing and changing organizational culture: based on the competing values framework. John Wiley and Sons DuBrin, A. (2009). Leadership: Research Findings, Practice, and Skills. Cengage Learning Gilligan, C., Wilson, R. (2009). Strategic Marketing Planning. Butterworth-Heinemann Mankin, D., Cohen, S. (2004) Business without boundaries: an action framework for collaborating across time, distance, organization, and culture. John Wiley and Sons Mullins, L. (2007) Management and organisational behaviour. Pearson Education Pride, W., Hughes, R., Kapoor, J. (2009). Business. Cengage Learning Rainey, J., Scott, B., Reichard, J. (1999) Global Thinking Global Logistics. DIANE Publishing Read More