Challenges Faced by Organizations and Their Solutions - Assignment Example

Challenge BMW-Credit Crunch BMW definitely rings a bell and is a highly regarded player in the car industry. These letters represent Bayerische Motoren Werke. The quick translation in English is Bavarian Motor Works, where emphasis is placed on "motor". This is rationalized by the fact that BMW has leveraged well on this car part, catapulting it to certain success. The company has been established in 1913, under Karl Friedrich Rapp. It is not a known fact that the organization first began manufacturing engines for aircrafts. Its branding strategy, in the form of the logo, has been featured only in the latter part of the 1920s, and has in fact hailed from the form of a propeller. This pioneering effort likewise ended with the conclusion of the first world war, along with the signing of the Treaty of Versailles. In such treaty, it has been indicated that the organization is not allowed to produce such engines. With this change, the company has moved into the manufacture of motorcycle bicycles. Their first product in this segment came out in 1921, with the monicker "Flink". 7 years later, the company began manufacturing cars and the rest, as they say, is history (BMW Drives 2007). The Challenge The company has undergone financial difficulties, mainly because of teh credit crunch and the status of the economy of the country at that time. The pre-tax profits of the organization, has dropped by a fourth to €641m (£505m). The drivers of this outcome are higher risks, more stringent credit and incresed strength of their currency. However, the main drivr for its financial hardships was the US economy, which was not solitary in facing this issue. The situation has been further aggravated by the end of the first quarter of 08. This has lead to decreased credibility among consumers, and thus less sales. The organization has been compelled to lay off thousands of employees and to enlist millions to be able to answer for these financial hits. Towards March 2008, the earnings of the company decreased by more than 10%, to €539m (Gow 2008). Effects of the Challenge BMW has faced the situation squarely, weathering both its credit crunch and the recessionary situation of the US. They were able to turn things into their favor, and their success is mainly due to innovation. That is, they have producde novel cars, in an efficient manner, and thus this has increased sales (BMW Board Meeting 2009). Efficient Dynamics is the answer for BMW, which is the offering of cars with efficient fuel and gas emission, while also ensuring its practicality. For example, a car may be very fuel efficient and the whole life in travel is more than 60,000 miles having emission of lower than 225g/km. This has allowed clients to continue to patronize them. Overall, sales has increased by close to 20%, and by 13% YTD, in the UK alone. The company has been able to sell more than 2,600 cars in 2008 admist the financial crunch (fleetnews.co.uk 2008). CFV In this case, the CFV would be the lender for the member states of the EU, which would be the last recourse of BMW amidst the credit crunch. The company has been able to evade bankruptcy and therefore would be able to receive positive response from the government. It is likely that they will be able to survive the crisis. Moreover the organization has already began to implement a strategic plan for the long haul, tagged Number One, particularly in the United States to be able to further promote efficiency and cut down on overhead. This scheme likewise involves the emphasis on profitability rather than sales volume. Therefore, the company is effectively avoiding bankruptcy as faced by other car players, which may also become their CFV. Challenge 2: Club Med-Climate Change Club Med has just began when its pioneeers conceptualized setting up tents in beaches and offering low income, war torn Europeans a world-class vacation. The Club has been established in 1950 by Gerard Blitz. The authentic villages were straightforward, with memberss staying in huts by the beach and having common restrooms (Club Med Planet 2003). These common facilities and carefree conditions were met with much acceptance from then until now. In contemporary times, these villages now number 80 in total across five continents; it continually advocates cultural diversity. Moreover, they offer 5 categories of holidays with the following themes: (1) Experience the exceptional; (2) Have a taste of everything; (3) Discover New Horizons; (4) Stretch yourself to the limit; and/or (5) Feel Renewed (Club Med 2000). The Challenge The financial viability of such businesses similar to Club Med has been impacted by numerous issues such as credit difficultiees; surge in fuel costs; weather changes; among others. The writer has specifically chosen the problem of climate change which have affected them substantially. Over the long haul, the mean temperatue of the globe will most definitely increase and will ultimately mean changes in the frequency and volume of rain and snow. Moreover, it will have implications to the changing of seasons; the onslaugt of storms; and even the level of oceans and seas. With these ecosystems and those living within them shall also be adversely impacted (US Global Change Research Information Office, no date). Effects of the Challenge Given these, outdoor activities shall also be impacted on. The resource base ascertains the type of recreational activities that may be carried out in the said location. For instance, water is a requisite for swimming and sailing activities (International Institute for Sustainable Development 1997, p.1). Moreover, less snow and a briefer winter may have repercussions on the profitability of ski resorts who may go bankrupt without this base resource. Indirectly, this will mean the decline of tourism; the food, hotel, and resort segments such as Club Med. In addition, this will mean decreasing employment for those who work in these entities (ibid, p.2). Therefore, each sector must be able to quickly address the problem of climate change and proactively decrease Greenhouse Gas (GHG) contribution. There must be clear good will to be able to address and decrease GHG emissions. These come from the transport sector. Moreover, tourism players must also hold the same advocacy, and must be able to adjust to these changes in weather. Moreover, they may also deploy novel technology to enhance the efficiency with which energy is utilized (DAVOS Declaration 2007, p.2). Club Med may implement this by advocating recycling in the units they operate; the use of domestic product suppliers and converting to multi-sailable transportations means. All these point out to the reality that Club Med has to squarely face this challenge to remain viable (Jenna2small 2009). Currently, the company is already exerting efforts to decrease carbon emissions to allow them a certification in Green Globe. To address the remaining emissions, Club Med is teaming up with Carbonfund.org (Club Med, no year). CFV The CFV for Club Med will be the manner in which organization will drive the decrease of their caboon footprint. These will encompass their drive to advocate environmental sustainability and eco-tourism. This may be carriedo out through a collaborative and persistent effort to be environment friendly and to increase the standards of compliance of resorts to environmental sustainability efforts. Their CFV may be the occurrence that Club Med may be compelled to take on green practices because they may experience tension and lobbying from the government and green groups. One compromise may be the slowdown in the adoption of technologies that will counter the green efforts. Challenge 3: British Aerospace- Corporate Social Responsibility British Aerospace plc (BAe) is the biggest defense provider in the EU. Moreover, it is also a leading aerospace player. The organizations defense operations encompass aircrafts for the military; small ammunition; ships for war; and combat architecture and systems. In the sector of aerospace, the company has a 1/5 share in Airbus Industries. The latter is a service provider for airlines, manufacturing equipment for them. The organization has been established in the UK as a statutory corporation in 1977, as an outcome of the Aircraft and Shipbuilding Industries Act. The latter compelled the centralization and the merging of the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation. Two years after, BAe joined Airbus. The UK has drawn back their membership and support to the group in 1969 (Funding Universe, no date). The Challenge The organization has received critical comments from advocates of peace and human rights since the very nature of their business goes against these noble thrusts. Moreover, their business ethics are also being questioned. For instance, their Al Yamamah contracts with the Saudi Arabia, Indonesia, Israel and Zimbabwe are being questioned. This has permitted Bae to gain billions in earnings. Moreover, they have also been criticized since BAEs satellite arm in the United States manufactures subsystems for F-16s, 236 of which have been utilized by Israel Defense Forces (BBC News 1999;Jabarin 2006). The issues of arms advocates to sales of arms to South Africa is yet another point of contention. This is with regards the £2.3 billion transaction where the company supposedly accorded Hawk trainers and Gripen fighters to the region (BBC News 2007). Moreover, there has also been evidence that a radar system has been sold to Tanzania which has triggered an investigation (BBC News 2007). It has also been negatively commented on by Clare Short, the previous Secretary of State for International Development and of the World Bank (BBC News 2002). Effects of the Challenge As regards the contention on being unethical and corrupt (BBC News 2007), there has been considerable evidence that the contracts of the company in six organizations are being investigated by the Serious Fraud Office since they are engaged in global corrupt practice. Moreover, there has been evidence suggesting that Bae compensated past Chilean Dictator Pinochet £1 million (Leigh and Evans 2005) and his cronies to seal numerous arms transactions with Chile (Franklin 2006). Given all these repercussions and tarnishes on their image, the company sees the need to embark in corporate social responsibility programs such as those that cater to the education of the youth. These are meant to point out that their operations are also positively impactful to social, environmental, and economic facets of the community and the country. To be able to transparently convey the outcomes of their efforts, they may need to furnish the public with a Corporate Social Responsibility Report; a conventional financial report may not be adequate to show the related CSR issues. The provision of such a report will allow clearer perspective about their operations and a chance to understand the risks that are related to it. Moreover, it may enhance their dealings with those who have a stake in the company; stregnthen credence in them; increase likelihood of capital access; improve the image of the brand; further integrate their CSR programs; and reinforce communication amongst them (Global Reports 2006). CFV The CFV for BAE would be intent to convert to high technology and to be more commendable in terms of its people best practices. Their staff may be reassigned in the various locations they are present in, and there is a need to guarantee that employees are adequately taken cared of despite the recession. Moreover, the locations where BAE is present in may be involved in corporate social responsibility efforts. What the CFV may become is the drive and goodwill that the organization has to have to be able to realize these. Challenge 4: Green King-Business Ethics Green King is a well known brewery in the UK and is among those enlisted in the stock exchange of London. It was established in 1799 by Benjamin Greene. The latter is the great grand dad of Graham Greene. The latter is a renowned writer. The numerous changes in management which have transpired among domestic breweries has caused it much controversy, and yet has been able to sustain their growth amidst these leadership changes. The organization likewise has ownership of pubs and have been recognized in this segment; they likewise play in the hospitality industry through the Hungry Horse pub chain. It is the leader in the pub segment in East Anglia, owning many city and provincial entities. Moreover, the company owns a stand at the football grounds in Town Ipswich, Portman Road. Among the accolades that it has received are the Gold award during 2004 Campaign for Real Ale (CAMRA) Great British Festival in the Bitter category; and runner-up in the Champion Beer of Britain category (Absolute Astronomy.com 2009). The Challenge The continuous growth of Greene King has tarnished its image to a significant extent. Those who lobby against beer players suggest that they might as well be called "Greedy King" (Davies 2006). These lobbyists belong to a group called CAMRA and they say that Greene King is attempting to establish an exclusive foothold of the industry through buy-outs. They are effectively constraining consumer choice (CAMRA 2006). In addition, they say that the company is converting community pubs into restaurants and preventing other brands from entry (Davies 2006). Moreover, the manufacture of certain known beer brands have been transferred such as that in Bury St Edmunds. These incidents have compelled CAMRA to be against the shutdown of these beer players. By the closing of 2006, consumers lobbied against the "Greedy King". This transpired when a pub in East Sussex when against their move to the domestically manufactured Harveys Sussex Best Bitter from sale while still selling other brands (CAMRA 2006). More than a thousand consumers lobbied against them (Davies 2006). Their closures also has serious implications on employment, making the lobbyists angrier. Effects of the Challenge To avert the negative branding of the company as a "Greedy King", the company should use a human relations model that guarantees that the organization would attend to its human resource. Best practices in human resource such as training, flexible contracts, decreased work hours, career pathing, are among the options. Management must take to heart the adage that people are the organizations most valuable resource. This will clearly translate to more profits into the companys coffers. CFV The CFV is likely the degree to which they meet the rules and regulations set forth by the various authorities on HR. Moreover, another CFV would be how closely they are able to comply by these protocol. This CFV may be that the organization fails to transform its operational practices into those which are compliant, that have to do with pub operations in the UK. Conclusion We have gleaned through the challenges that are confronted by the organziations, with the specific details as to how each of them are addressing these issues and the points that they can leverage on. It is clear that companies have to adapt to the demands of the environment and take an empowered stance in dealing with these difficulties. I have based my assertions from the manual and the company reports to deduce meaningful insights for the current paper. To conclude, the leaders of these companies must be able to craft out-of-box solutions to these challenges. These challenges, rather than bogging them down, should be effectual triggers for innovation and further growth. References Absolute Astronomy.com 2009, Greene King Brewery. Available from: http://www.absoluteastronomy.com/topics/Greene_King_Brewery (Accessed 16 May 2009). BBC News 1999, Deal reached on shipyard future. Available from: http://news.bbc.co.uk/1/hi/scotland/563784.stm (Accessed 15 May 2009). BBC News 2002, Tanzania radar sale waste of cash. Available from: http://news.bbc.co.uk/1/hi/uk_politics/2044206.stm (Accessed 16 May 2009). BBC News 2007, BAE in several corruption probes. Available from: http://news.bbc.co.uk/1/hi/business/6339625.stm. Retrieved on 2007-02-15 (Accessed 15 may 2009). BBC News 2007, BAE South African deal probed. Available from: http://news.bbc.co.uk/1/hi/business/6255725.stm (Accessed 16 May 2009). BBC News 2007, Tanzania could seek radar refund. Available from: http://news.bbc.co.uk/1/hi/world/africa/6324169.stm. Retrieved on 2007-02-19 (Accessed 16 May BMW Board Meeting 2009, (video recording). Available from: http://www.youtube.com/watch?v=vVDRtY7TN9g (Accessed 13 May 2009). BMW Drives 2007, BMW History, Available at: http://www.bmwdrives.com/bmw-history.php (Accessed 15 May 2009). CAMRA 2006, CAMRA Slams Greene King for Killing off Brewing in Kimberley, Campaign for Real Ale. Available from: http://www.camra.org.uk/page.aspx?o=218286 (Accessed 17 May 2009). Club Med, (no date), Carbon Footprint Reduction. Available at: http://www.clubmed.com.au/cgi-bin/clubmed55/SP/activitiesDescription.do?page=CARBON_CALCULATOR_14AE&PAYS=14&LANG=AE (Accessed 17 May 2009) Davies, N 2006, Bonfire night protest turns heat on brewery, The Guardian, 4 November. Available at: http://www.guardian.co.uk/uk/2006/nov/04/nickdavies.uknews2 (Accessed 17 May 2009). DAVOS Declaration 2007, ‘Climate Change and Tourism Responding to Global Challenges’, in Second International Conference on Climate Change and Tourism, pp.1-4. Available at: http://www.gdrc.org/uem/eco-tour/Davos-Declaration_2007.pdf (Accessed 17 May 2009). Fleetnews.co.uk 2008, BMW defies credit crunch, 28 October. Available from: http://www.fleetnews.co.uk/news/story/BMW-defies-credit-crunch/48521 (Accessed 15 May 2009). Franklin, J 2006, ‘Pinochet and son deny selling cocaine to Europe and US’, The Guardian, 12 July. Available from: http://www.guardian.co.uk/world/2006/jul/12/chile.drugstrade (Accessed 16 May 2009). Funding Universe (no date), British Aerospace plc. Available from: ,http://www.fundinguniverse.com/company-histories/British-Aerospace-plc-Company-History.html (Accessed 14 May 2009). Global Reports 2006, BAE Systems Plc (formerly British Aerospace) Corporate Social Responsibility (CSR) Report 2006. Available from: http://www.researchandmarkets.com/reports/455951 (Accessed 16 May 2009). Gow, D 2008, ‘Credit crunch puts brakes on BMW and Daimler’, guardian.co.uk, 29 April. Available from: http://www.guardian.co.uk/business/2008/apr/29/automotive.europe (Accessed 15 May 2009). International Institute for Sustainable Development 1997, ‘The Effects of Climate Change on Recreation and Tourism on the Prairies: A Status Report’. Available from: http://www.iisd.org/pdf/recreation_climate.pdf (Accessed 17 May 2009). Jabarin, S 2006, “Stop Arming Israel’, CAAT News, October & November, pp.8-9. Available from: http://www.caat.org.uk/issues/IsraelPostcard.pdf. Retrieved on 2006-11-02 (Accessed 15 May 2009). Jenna2small 2009 (video recording), Available at: http://www.youtube.com/watch?v=tpLhTNXtFnA (Accessed 14 May 2009). Leigh D & Evans, R 2005, ‘Revealed: BAE’s secret £1m to Pinochet’, The Guardian, 15 September. Available from: http://www.guardian.co.uk/world/2005/sep/15/bae.freedomofinformation. Retrieved on 2006-10-27 (Accessed 15 May 2009). US Global Change Research Information Office (no date), ‘What is climate change?’. Available from: http://www.gcrio.org/gwcc/part1.html (Accessed 17 May 2009). Read More