Contemporary Management of Coles Supermarket - Case Study Example

Contemporary Management The Case of Coles Insert Name Course, Class, Semester Institution Instructor Date Contemporary Management Introduction At 98 years, old today, Coles Supermarket is one of the biggest employers in the private sector of Australia. Being the second largest supermarket after Woolworths, Coles has 100000 employees and runs close to 750 stores nationally. The large scale retailer, much like all other large scale retailers, deals in quite number of household items. These are sourced from various manufactures, both local and international, to make the variety, typical of any supermarket. Worth noting is the fact that the large scale has been in business for a considerably long period of time. Having been established in the year 1914 on the 9th day of April at Melbourne’s suburb of Collingwood, the supermarket has been described as one of the oldest retailers that have had adequate time to make the best out of customer loyalty. The organization is known for its unique approach to management of both resources, including personnel, and structures. Many small and middle organizations have sought to carry out benchmarking on the hyper store. Coles is one of the companies whose internal operations can be compared to that at apple computers. Why? Because of the flexibility with which the human resources function is run. This paper endeavors to explain various management concepts in light of Coles Supermarkets, Australia. Perhaps the most striking feature about the management function at Coles is the fact that the managers, along with emphasizing effectiveness and efficiency in the work force, use a flexible and informal approach to the manner in which the employees and junior managers go about their information. The informal system is in such a way that there is no bureaucratic structure and serious formalities observed. As much as the chain of command is in existence, it is not strictly adhered to as the organization embraces creativity. Creativity is usually hindered by such things as bureaucracy, also referred to as red tape management (Triplett, 2007). Bureaucracy is effective where theory X is used to manage and supervise the employees. Arguably, theory X is the worst form of abuse to a member of staff in the contemporary corporate world. The theory emphasizes the assumption that employees dislike work and will at all times do their best to evade work, and believes that all employees should be supervised and threatened with firing and punishment in order to deliver results. Contrary to theory X, theory Y believes that the work force is made up of grown up individuals that can make mature decisions. According to theory Y, the employees are most productive when given the capacity to manage themselves, their time and resources at their disposal. Worth noting is the fact that Coles, much like all other modern organizations embraces a consultative approach to decision making. Consultative management is n line with theory Y and is aimed at making the employee a primary part of the organization (Buono, 2001). This way, the employees are believed to be mature and proud of their positions. In other words, Coles’ employees can make minor decisions in the absence of a supervisor. This is why, the organization, in its training has such short but critical courses as critical thinking. Critical thinking in the context of business means that the decisions made must have been weighed among the many possible outcomes. The essence of critical thinking is behind the fact that daily business problems are rather complex and call for proper analysis. The management functions at Coles borrow a great deal from the classical approaches such as scientific management and administrative management. Even so, max Weber’s bureaucracy is not as much applicable at Coles. The management at Coles recognizes the fact that in the modern world of business, there is no universally accepted method or approach to management (Griffin, 2012). The management approaches apply relative to the organization since the management style is closely related to all other functions and elements of the organization. For instance, the fact that the employees are different in terms of ideology and background means that the business is not made up of homogenous elements. As such flexibility is paramount. The fact that a business organization is operating in an environment where globalization is becoming inevitable, it is only reasonable to conclude that the workforce is made up of individuals from a different background. In straightforward terms, the personnel come from diverse cultures. Typically, the modern work place is embracing cultural diversity. This way, such organizations as Coles have employees from all over the world. All races are included in the workforce since the organization observes the provisions of Equal Employment Opportunity (EEO). At Coles, the managers recognize the fact that human beings are complex and have their unique needs. This means that the problems of the employees are responded to, at individual level. In other words, a manager does not address an issue as something that affects the workforce, but rather an individual’s problem. This has ensured close relations between the management and the workforce. An open system is one that interacts with the outside. In other words, open systems are those systems that have a mutual relationship with the immediate environment (Burton et al, 2011). In management and business, the environment refers to more than just the natural surroundings .the environment is made up of such things as the community, the competitors, the legal-political climate, the economic conditions as well as the market forces. Coles as an open system imports its resources from the environment. Worth noting is the fact that Coles, as a system, has subsystems in the form of departments. Actually, the subsystems are in such a way that one subsystem serves particular functions. The key subsystems at Coles are the accounting and finance systems, the sales and marketing systems, the operations department as well as the information systems. Such subsystems interact with each other and achieve mutual benefit. As an open system, Coles obtains it resources, including the human resources from the environment, both local and International. The company sources such things as stock from overseas as well as from within. This makes the organization a global player. Globalization touches on all features of the organization. As such, the training sessions of the organization tend to thoroughly orient the new employees so as to eliminate the incidences of cultural shock. Cultural shock has been described variously as the confused state in which people find themselves immediately after moving into a new culture (Gupta, 2002). Ethnocentrism, which is the propensity of an individual to consider their ethnic background superior to all other groups within the organization, is highly discouraged in modern business concerns .it is for this reason that Coles has instituted a code of conduct and disciplinary measures which is of the effect that any conduct of racist or ethnocentric tendencies is fired. Organizing is a primary function of management. Organizing concerns itself with such things as the division of duties and responsibilities in such a way that every individual has a task to perform,. For which they are responsible. At Coles Supermarkets, organizing is done in such a way that individuals are assigned duties according to their qualifications and work experiences. The accounting, finance and audit system for instance are made up of those people that are proficient in matters relating to business and resource planning. It is, however, a policy of Coles Supermarkets to practice job rotation. Job rotation is an audit procedure that concerns itself with the random changing of roles such that the people within the same department play different roles at different times. This organizing procedure is concerned with minimizing fraud and manipulation of important figures. Fraud is one of the biggest setbacks to business success. Organizing is majorly concerned with human resources as well as financial and capital resources. The financial resources are allocated in such a way that the most important activities or parts of the system are allocated funds first and substantially. This is to say that all those functions of the business are allocated more funds and earlier than others. It is for this reason that Coles allocates sufficiently large sums of money and such resources as personnel and vehicles to the marketing function. Much like all other retail businesses, the major objective is to maximize sales. The higher the sales volume, the better the returns expected by organization. Coles has continuously endeavored to gain a greater share of the market than its all time rival Woolworths. It is therefore recognized that intensive marketing efforts are one most effective way of achieving this aim. As such, more resources are committed to sales promotion. A key feature of the organization function is the organizational design. This one concerns itself with the main aim of aligning all business decisions to the organizational mission and vision (Deb, 2001). The structure, typically represented in the form of a chart indicates the channels of communication available to both the employees and the managers. The channels of communication concern themselves with both vertical and horizontal communication. At Coles, the organizational design is in such a way that the horizontal communication is as informal as it can typically be. On the contrary, the vertical communication is punctuated with bureaucracy in such a way that it is involves much paperwork. This is mainly because such paperwork entails transactions that may affect the long-term performance of the organization. Coles, much like serious competitors, recognizes informal communication as being more important than formalized procedures since informal dealings encourage creativity at all levels of management. The organizational design at Coles embraces an organic continuum. This makes the structure easy to change from time to time. The organic structure as well eliminates such rigid practices as those entailed in red tape management. The structure of the organization undergoes continuous change and upgrading in response to changes in such dynamic variables as technology. Technology is ever changing for the better. This is referred to as continuous advancement. Much like other organizations with information and technology systems, Coles must at all time upgrade its systems. Clearly, the organizational structure must be premeditated in such a way as to fit into the modern technology, and the environment, both internal and external. This may mean that the organization has to cater for the varying needs of the employees, the suppliers as well as the customers. Essentially, the customer is the most important stakeholder in any organization (Lussier, 2012). Coles have it in their records that the employees and the clients are the most important stakeholders. This is to say that organization depends a great deal on the characteristics and size of its human resources. The organizational structure as well takes into consideration contingency planning. This means that the organization has to scan the entire external environment for uncertainty and risks (Chick & American Society for Training and Development, 2004). This is because the environment is so much dynamic and changes from time to time in response to such variables as inflation, and such like economic uncertainties. Coles has to cater for such unforeseen uncertainties as changes in interest rates, loss of market share, and stringent competition. Similarly, Coles has a considerably strong link between its organizational structure and its work force. The human resource, at least in the modern world is made up of heterogeneous characters. This means that the individuals making up the organization’s workforce, all have unique traits and capacities to conduct various activities. In other words, the talents and capabilities vary from individual to another. Coles, as one of those organizations that embrace modern management techniques gives much prominence to talent and individual creativity. It is for this reason that the individuals are at liberty to make minor decisions that do not need the expertise of strategic managers. Similarly the junior managers and line supervisors find it in their discretion to organize and allocate duties without much red tape procedures. Coles embraces informal structure. Much like the legendry Apple Computers the supermarket emphasizes on informal relationships and communication among its employees, as well as between such employees and the management the decision to embrace informal relationship is based on the fact that scientific management and the classical theory Y identify informal relationships and groups as being more productive than the formal work sections organized by management. The organizational design at Coles embraces the concept of specialization, departmentalization, chain of command, formalization, decentralization and span of control. Specialization concerns itself with the allocation of duties according to professional competence and working experience. Specialization has however been identified as an ineffective way of handling activities as it is monotonous and encourages fraud. It is for this reason that Coles encourage job rotation at random intervals. Just like any other organization operating in the contemporary business world, Coles experiences various socio-economic problems. Among these troubles is the difficulty in handling a work force made up of individual from diverse cultures. Cultural diversity is an indispensable part of the human resources of any organization. In a culturally diverse organization, the managers face various challenges, handling cultural shock being among the most common. Unlike the traditional organizational setup where the organization’s workforce was made up of people from one community or at least from the same country, contemporary business organizations have employees from all over the world (Weiner, 2002). The organizations therefore embrace a code of conduct that caters for cultural diversity. Similarly, Coles has instituted systems that cater for such issues as work-life conflicts. As such, Coles has come up with schemes that cater for people with special social needs. For instance, Coles provides different working schedules for mothers who are single parents and couples in diverse occupations. As mentioned earlier on, Coles emphasizes the importance of the human resources. The organization identifies the human resources as the most important stakeholders since they are the life and blood of the business. The organization cannot run without the personnel since, being a retailer, Coles needs people at every stage of every department. Arguably, the organization invests more in its human resources than it does on such non monetary capital as computers. The fact that Coles embraces cultural diversity gives the organization an international outlook. The organization has people from many countries across the world. This way it gains a competitive advantage over its competitors since the people from the diverse cultures contribute varied ideas to the development of the organization. The diverse ideas help the organization survive in varied conditions. The human resource practices of the organization are against discrimination and other employment malpractices such as sexual harassment and discrimination. The policy of the organization is such that all individuals that are reported for such malpractices are dismissed with immediate effect and subjected to litigation procedures. Additionally, the policy of Equal Employment Opportunity (EEO) is followed to the letter. People are recruited on merit and objectivity. Such things as ethnocentrism are discouraged and do not exist in the recruitment procedures of Coles. The Human Resources Function at Coles concerns itself with attracting, training and retaining the personnel. The organization carries out on the job instruction. This is a form of guidance where the recruited individuals are trained as they work (Maguire, 2003). This is a way of supervising the work force especially the newly recruited people. It as well enables the trainers and supervisors are capable of identifying the unique needs of the individuals. Coles embraces emphasizes proper remuneration and motivation of its employees. Remuneration is one way of motivating the employees. Coles motivates its employees through carrying out performance appraisal. Such appraisal helps the organization recognize those individuals that have performed exemplarily well in their duties. Coles gives awards to those employees with creativity and knowledge every year. Motivation can as well take the form of expressing care and apprehension for all the members of the work forces. In conclusion, the organization in question embraces all the novel concepts of business. Cole’s management borrows from all management theories, starting from the classical to the most modern theories of management such as participative management. The fact that globalization is an integral part of every organization, has made Coles embrace cultural diversity. It is from such cultural diversity that Coles gains competitive advantage. Such competitive advantage has enabled the organization to gain a bigger market share compared to most of its competitors. The organization design at Coles embraces an organic continuum. This makes the organization structure flexible to the extent of accommodating people of diverse cultures. Coles emphasizes the importance of such functions as motivation. Motivation refers to the collective efforts of an organization to make the employees willing to deliver the best. Motivation takes various forms and has performance appraisal as a central part. One of the most unique things about the business is the fact that it embraces informal groups and communications. References Buono, A. F. (2001). Current trends in management consulting. Greenwich, Conn: Information Age Publ. Burton, R. M., Obel, B., & DeSanctis, G. (2011). Organizational design: A step-by-step approach. Cambridge: Cambridge University Press. Chick, E. D., & American Society for Training and Development. (2004). Fundamentals of work-life balance: Career development. Alexandria, VA: ASTD Press. Deb, S. (2001). Contemporary issues on management. New Delhi: Atlantic Publishers and Distributors. Griffin, R. W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage Learning. Gupta, C. B. (2002). Contemporary management. New Delhi: Ashish Pub. House. Lussier, R. N. (2012). Management fundamentals: Concepts, applications, skill development. Mason, Ohio: South-Western. Maguire, E. R. (2003). Organizational structure in American police agencies: Context, complexity, and control. Albany: State University of New York Press. Triplett, James. (2007). Organizational Design: a Holistic View. Gardners Books. Weiner, B. (2002). Human motivation: Metaphors, theories, and research. Newbury Park, Calif: Sage. Read More