SWOT Analysis of Woolworths - Essay Example

? Total word count 1525 Case Analysis: Woolworths SWOT analysis of Woolworths: Strengths: Luscombe has altered the organizational practices in such a way that they have become more environment friendly. He has encouraged the employees to consume lesser resources to generate the same volume of output. Because of sustainable practices implemented by Luscombe, the CO2 emissions have reduced considerably. Luscombe has taken many steps to improve the company’s profitability. He has created an electronic payments processing system that reduces cost and provides a means to launch the credit card for the store. It also facilitates growth of the company’s telecommunication and financial services. Moreover, data mining has improved in Luscombe’s period and customers’ buying habits are better examined to customize the organizational policies according to them. There has occurred a general improvement in the standards of the store. Weaknesses: In the 8 year reign in which Corbett served as the CEO of Woolworths and his policies resulted into the increase in the returns of shareholders by 300 per cent. On the contrary, the policies implemented by Luscombe since 2006 have increased the return of shareholders by no more than 40 per cent in the whole 5 years. Thus, the competition is between 8 years and 5 years of governance, and 300 per cent and 40 per cent of increase on the return. This clearly speaks of the fact that the strategies implemented by Corbett as a CEO were more conducive for the increase in shareholders’ return as compared to those of Luscombe. Although the organization has overall remained in profitability in Luscombe’s period, yet much of this can be attributed to the long term effects of the rational policies of Corbett instead of the policies adopted by Luscombe. Opportunities: Woolworths has conventionally managed to attract a large volume of talented young candidates for employment. Woolworths provides its workforce with training over a vast range of disciplines in order to improve their competence and inculcate sound management skills in them. It is the very training that is one of the cardinal reasons of success of Luscombe in his management of the company. Luscombe has served in Woolworths for 28 years, in which he received training and polished his skills on various levels as a manager. On job training is one of the most attracting characteristics of an organizational culture for the employees because they avail it as an opportunity to enhance their skills and become an asset for the organization. Having received the training, they feel their skills improved, which offers them a feeling of assurance that their job is secure. They know they are better positioned to fulfill the needs of a particular business and hence, have both job satisfaction and job security. Threats: Corbett had maintained a culture in which all employees made their best effort to enhance the company’s profits and reduce the costs. However, Luscombe does not approve of the fact that employees work for as many as 12 hrs and sometimes even more than that. He thinks that the staff is putting in unnecessary effort to make the business profitable. Luscombe needs to realize that it is the same work pattern that had increased the return on shareholders’ investment by 300 per cent and that had doubled the revenues to $ 36 billion. The rate of increase in the return of shareholders’ investment has already decreased more than 3 times what it was in Corbett’s period. The current strategy of Woolworths: Currently, Luscombe is the CEO of the company. Luscombe is a very open and easily approachable kind of CEO. He has maintained very open relations with the senior management as well as the staff of the company. His attitude with the company staff is quite friendly, and he encourages team work. During his reign, all of the personnel of the company have united as a strong team. The staff is making all efforts to comply with the instructions of Luscombe. Their compliance has recently caused the company to benefit from a manifold increase in revenues and profits. How much of the success of Woolworths depends on the personal skills of Michael Luscombe and his predecessor Roger Corbett? Success of Woolworths fundamentally depends upon the personal skills of Michael Luscombe and his predecessor Roger Corbett. CEO assumes the most important role in an organizational setup, and controls the whole organization. He/she essentially assumes the position of the focal point, and the whole organization functions according to the plans devised by him/her to achieve the strategic goals of the organization and to gain competitive advantage over the contemporaries in the market. During his reign, Roger Corbett had remained quite conservative in his dealings with senior management. He served in Woolworths as a CEO for a total of eight years. In that period, revenues generated by the company doubled to $ 36 billion and the profitability of the business quadrupled to $ 1 billion. Much of this increase in profit can be attributed to the rational management and leadership policies of the CEO Roger Corbett, who considered everything in the business with detail and took every possible measure to reduce the costs. Can Woolworths’ success be used as a model for other companies? Why?  Woolworths’ success can not be modeled for other companies. Requirements of an organization vary from culture to culture. Some cultures require the CEO to offer restricted accessibility to others while other cultures require the CEO to maintain a more open relationship with peers. Many times, it has so happened that managers who have tried to implement the culture of an old company into a new one, have ended up making the conditions even worse. In any organization, there are many factors that jointly decide the sort of organizational culture that suits it. Such factors include, but are not limited to the employees’ perceptions about the organization, their satisfaction with the job, their job security, the micro and the macro environment. Is it all brand attraction or is there something more to the success, and to the management, of Woolworths? There are a lot of factors that play their role in making the company successful that are not limited to the brand attraction but also include the role of engineers as managers, the way policies are planned and implemented. Planning happens to be one of the 4 basic management functions, while the other three are organizing, leading and controlling (McNamara, n.d.). Planning defines the course of action that may be adopted to reach the organizational goals and practice the strategies. Luscombe has planned the work in such a way that has resulted into a noticeable decrease in the emission of CO2 into the atmosphere. This is a big success of Wooworths because global warming is a big concern in the contemporary age. In addition to that, it needs to be noticed that Luscombe has spent 28 years of his professional life in Woolworths. He had initially started as a Safeway store runner in Woolworths. Gradually, he worked on various other positions in Luscombe, and became the national banking manager. Finally, he was considered experienced enough to control the organization as a CEO, and he did it fairly well. The most fundamental factor that every manager needs to take care of in order to make an organization successful is that the subordinates’ concerns are addressed so that they remain satisfied with their job and comply with the instructions of the managers. Organization fundamentally progresses because of the efforts and hard work of the employees. Therefore, competence of the employees is vital for the achievement of organizational goals. Various theories have been proposed from time to time to justify that. The figure below shows the Hierarchy of Needs theory proposed by Maslow: Maslow’s Hierarchy of Needs (NetMBA, 2010). According to the Maslow’s Hierarchy of Needs, managers need to address the physiological, safety, social and esteem related needs of the employees in order to motivate them for increasing their performance and productivity. Unless the employees are motivated enough to take steps for self-actualization, they can not be expected to play their constructive role in the achievement of organizational goals. According to the Maslow’s Hierarchy of Needs theory, employees’ needs can be categorized into five types. Physiological needs are the most important as they are vital for the employees’ survival. Then come the safety needs. Unless the safety needs are not addressed, their social needs can not be met. Same holds true for other needs on higher level. An in-depth analysis of the Maslow’s Hierarchy of Needs suggests that managers need to address all of the lower level needs in order to make them play their respective roles in the attainment of organizational goals. This speaks of the importance of employees’ satisfaction. Woolworths is successful because it addresses these needs of employees. That is why Luscombe got promoted from a Safeway Store runner to the CEO of the company. It is important to take the opinions of the subordinates while making decisions. In the case of Woolworths, Luscombe discerned employees’ opinions about the way business could be made friendlier to the environment. He devised the strategies accordingly to which employees complied, and their mutual effort and participation successfully reduced the CO2 emission. References: McNamara, C. (n.d.). Planning in Organizations. Retrieved from http://managementhelp.org/plan_dec/plan_dec.htm. NetMBA. (2010). Maslow’s Hierarchy of Needs. Retrieved from http://www.netmba.com/mgmt/ob/motivation/maslow/. Read More