Organization of Choice in IceCool Company - Case Study Example

Organization of Choice in IceCool Company Based on the stiff competition that is being experienced by companies in the contemporary business atmosphere, there is a need to come up with an appropriate business plan that acts as a guideline towards the achievement of a firm’s goals. Business plan entails a formal statement that indicates the objectives of a firm and the techniques that are emulated to achieve these goals. Some of the major aspects that are covered by a business plan include marketing, human resources, finance and other operations. One of the major uses of a business plan is to enable a company attract investors in order to expand its capital base. Additionally, it assists an organisation in the strategic planning that entails defining the directions and the management decision that are adopted by a firm. IceCool Company is a multinational firm that specializes in the production and marketing of IceCool bottled water. This paper candidly analyses the business plan that is adopted by IceCool Company as well as the management styles that have made the company to be attain a competitive advantage. Objectives IceCool objectives includes Maintaining strong controls on the quality and quantity of its products, costs as well as its operations Attain sales target of each month Stay as an international company with quality products Average sales of between 2,500,000 -5,000,000 US$ per year Receiving order of large quantities Product The main product produced by IceCool Company is IceCool bottled water. Organizational structure In order to achieve its objectives, every organisation must adopt an appropriate organizational structure that clearly defines the duties of all the employees. Based on the need to streamline communication as well as effective allocation of tasks in its operations, IceCool will emulate bureaucratic structure in its management policies (Robbins and Judge 35). Being noted for allowing standardization in an organization, bureaucratic structure allows complex organizations to effectively deal with the major challenges that they face in the international market. The section below indicates the organizational structure and the duties of the management team. Managing Director Human Resources Manager Finance Manager Marketing Manager Chief Accountant Internal Auditor Account Assistant Duties of the management teams Position Duties Managing Director Supervising and directing all the departmental managers Linking IceCool Company with other firms Ensuring effective use of company resources Human Resources Manager Hiring and conducting interviews Initiating compensation policies to be adopted by the company Maintaining conducive working environment Making weekly report to the Managing Director on the progress of all the employees Marketing Manager Supervising marketing executives Initiating marketing policies to be adopted by the company Chief Accountant Maintaining vital company financial records Authorizing payments Account Assistant Preparing annual and monthly financial reports Ensuring all the accounts records are in the computer system Payment of monthly, quarterly and annual tax returns Internal auditor Ensuring the company complies with international accounting standards Supervising the accountants Advising the management on cost control and budgetary allocation Mission statement IceCool strives to provide quality product that meets the needs of its customers. We are focused at making our customers have a great product that is equal the value of their money. One of the major aspects that make us competitive is providing a unique product that can be consumed by all customers regardless of their ages. In this regard, our mission statement is IceCool water makes us equal is not comparable. Employee welfare is also vital to us. This is based on the fact despite our unique product; we require them in distribution and enhancing customer awareness thus increasing the company sales. By targeting young clients especially during sporting activities, we are focused at expanding our customer base thus putting our customers at bay. Keys to success The key to success of IceCool Company are: Creation of unique, innovative products that differentiate us from our competitors in the bottled water industry. Execution of our main objective to provide excellent products at low prices and attractive packaging that is makes our products to be easily identified by our customers. Controlling costs in all our departments to increase the gross profit Hiring skilled workforce, adequate training of employees, motivating and providing ample opportunities to ensure that our employees are developed Influence of the founders One of the major aspects that play a vital role in the success of a company is the influence of the founders. Through adoption of sustainable management policies, founders are key stakeholders who determine the future and the profitable of any company. Significant aspect that was established by the company founders is effective communication. Based on the wide range of operations that IceCool is undertaking, effective communication cannot be overlooked. In this regard, the company undertakes regular evaluation of its employees thus ensuring that best performing employees are rewarded. Through the established feedback system, the employees are in a position to give their views on the evaluation among other processes undertaken by the company. Another notable influence of the founders is use of team work. By initiating strong marketing and management teams, the company has been able to achieve its target despite the challenging and complex tasks. Through the strong team under experienced team leaders, employees performance has been improved an aspect that has made them to achieve their own goals as well as the company objectives. Based on the continued motivation of the employees as a result of adoption of flexible benefits including training, gifts and promotion employees productivity has been significantly been improved. Management styles IceCool Company employs democratic style in its management strategies. This entails allowing all our employees to participate in the decision making process. In this way, major policies adopted by the company are accepted by majority of the employees. In addition to the democratic management style, the company also adopts Laissez-faire style in its foreign branches. According to this style, managers working in foreign branches acts as mentors as well as stimulators. One of the major factors that have made it possible to use Laissez-faire style of management is the inspirational leadership that is adopted by our senior managers. This implies that the managers easily understand the various initiatives that are undertaken by the subordinates (Tannenbaum and Schmidt 34). Additionally, the subordinates share the same vision of making the company to succeed. One of the major positive implications of the use of the Laissez-faire is that it has created a culture of creativity among the employees. For example, the sales executives have come up with innovative ideas during their marketing campaign an aspect that has resulted to increased sales for the company in the local and international markets. To prevent occurrence of conflicting activities in the management of the company affairs, the company has embarked on training its employees on communication skills. IceCool Company SWOT analysis Strengths IceCool has a strong brand that makes the company to be at a competitive position as compared to its rivals in the industry. Being a producer of non-alcoholic product, the company has a large market share in the international market thus benefiting from high sales that are imperative in the expansion of the company. Another notable strength is the skilled manpower an aspect that has resulted to adoption of effective policies such marketing strategies and innovation. Through the establishment of various outlets in the developing countries, IceCool has been able to control the upcoming markets before the competitors enter the markets. Based on the high level of innovation and product design, it is difficult for the competitors in the soft drink industry to copy the products of IceCool. In this regard, the unique nature of the company product makes it possible for the consumers to easily identify the brand. Based on the large number of employees, IceCool is able to distribute its products across many countries in the world. Strong customer awareness that has been achieved after an extensive promotion and advertising campaign has made the company to increase its customer base by 50% in the last 2 years. The high demand for IceCool bottled water especially in the regions that are hot and dry, has triggered the use of modern technology in the company production facility. In this way, the company has resulted to production of large volumes of products thus making it possible to meet the high demand in the market. This has also been achieved through the increased investment in terms of warehouses and transporting trucks. Weakness IceCool has not fully diversified its product portfolio. Although this does not negatively affect the company sales, it has allowed competitors such as Coca-Cola Company that has more than 500 brands to control the industry. Due to limited product portfolio, IceCool has not distributed its risks thus exposing it to low sales especially in the countries where the competitors have fully established their operations. Opportunities One of the major opportunities that will enhance the growth of our company is the merger and acquisition strategies that it has initiated. By partnering with other companies that are significantly established in the market, IceCool will effectively distribute its products in the market. Through the establishment of various games at the international level, IceCool Company has a chance of expanding its sales during such events. At the same time, the company will effectively advertise its brands thus creating a strong customer awareness and loyalty. As the use of e-marketing is being considered by majority of multinational companies, IceCool will emulate social sites including face book and twitter to advertise its brands. In this way, it will create strong product awareness among the young consumers who are regular visitors of social sites. Threats IceCool face stiff competition from major companies such as Coca-Cola and Pepsi. Based on the fact that companies can freely enter and exit the soft drink industry, there is a high possibility of many firms being established in the industry. Consequently, the competition will be stiffer thus resulting to low sales for IceCool. The political instability in the third world countries is another notable threat that will face our company. It is worth to note that despite its effort to expand in the developing countries, political unrest can result to destruction of properties and other company resources resulting to ceasing of the major operations. Similarly, increase in the level of poverty among the low income earners will result to low demand for the company product thus making it difficult to attain its objective of increasing annual sales. Expected cash flows Based on the increased IceCool operations, the company is expecting to increase its cash inflows while at the same time reducing cash outflows. In this way it will have enough cash at its exposure to meet short term liabilities. Major cash flow activities that the company will emulate include operating activities, investing activities and financing activities. Operating activities Operating activities entails production and sales in addition to the transportation and collection of payments from our customers. Other key operating activities include purchasing machines, raw material as well as buildings. As depicted by the international accounting standards operating cash flows also covers the interest payable on loans, funds received after the sale of products, wages paid to the employees as well as interest payments (Epstein and Jermakowicz 26). Investing activities Investing activities includes the sale or purchases of a company assets for example land, equipment, building and securities. In addition it covers loans received from the clients as well as payments made during merger and acquisitions. Financing activities Financing activities entails the cash inflow from various stakeholders such as shareholders, banks and investors. As organisations generate income, they should pay dividends to the shareholders as a way of retaining their loyalty towards the company. Based on the requirements by the international accounting standards, IceCool Company will include various aspects in its financing activities. These include proceeds received after issuing debts either in short term or long term bases, payments done after repurchasing of IceCool shares as well as capital leases. The table below indicates the expected cash flow from the major activities in the next five years. Figures are in US$ 000. Activities Year 1 Year 2 Year 3 Year 4 Year 5 Operating 1200 1800 2500 3000 4500 Financing 2500 3000 3500 4000 5000 Investing -1500 -1500 -2000 -3500 -4000 Net cash flow 2200 3300 4000 3500 5500 Aligning organizational and management goals In order to meet the objectives of an organisation, it is imperative for the management team to ensure that their goals and company objectives are in alignment. One of the major steps that IceCool Company will emulate is to set its goals. Once the company objectives have been initiated departmental managers will be given opportunity to set their own goals. The Managing Director will communicate with other managers on the goals they are expected to achieve and how each of the company tasks will be completed. In this regard, the company will employ the SMART strategy in its alignment process. Specific: The management will ensure that their goals and organizational goals are specific. This will include answering questions such as who is responsible for undertaking a particular task, when will a task be done, what goals are to be achieved after completion and why is the task important. Measurable: To ensure that the progress of achieving the goals is determined, the management will initiate a measuring technique such as the deadlines of achieving a goal, percentage of work done and the time taken to achieve an objective. Attainable: IceCool will ensure that organizational and management goals are attainable. By setting goals that are easy to achieve but highly beneficial to the managers, the company will also be in a position to achieve its objectives. Relevant: By ensuring that goals of their organization are relevant, manager will also be in a position of making relevant goals. In this way, employees as well as the managers will be highly motivated thus improving their general performance. Timely: Based on the need to achieve their objectives and those of the entire organization, IceCool management team will ensure that it clearly indicates the timeframe that will result to creating a sense of urgency within our organization. By providing a timeframe, managers will be motivated to work on their goals as soon as the company set them. Aligning organizational and employee goals It is vital for any organisation to align its goal with those of the employees. It is worth to note that workers may not feel motivated to attain the objectives of their company for example expanding in the new market, effective use of resources, increasing sales among others. Such demotivation is not entirely based on their unconcerned nature or bad intention but it is due to the fact that they have personal goals that they also want to achieve. Such goals include personal development, security, improving their financial position among others. Based on the personal responsibilities, employees may be more attentive to their goals thus calling for the management team to harness the power on employee’s motivation by ensuring that the organizational goals and the personal goals are aligned. The first step that IceCool Company will undertake during aligning organizational and employee goals is to ensure that the needs of the employees are given a priority (Stan and Demand 11). For example, during the times of economic hardship and low sales, the company will minimize layoffs and look for other means of lowering the costs of operations. In this way the employees will feel more secured thus resulting to a higher performance. Additionally, this strategy will make the employees have trust on the company thus making them motivated to achieve the objectives of the company. The second step will be to depict how the organizational goals will be beneficial to the employees in future. For instance, during low sales periods the company will reduce the resting time to ensure that promotion activities are increased. In this regard, it will be the duty of the management to convince the employees on the benefit of reducing vacation time that include increasing promotion in order for the company to address the future negative implications of low sales. It is essential to note that by explaining to the employees the reason for undertaking large scale policies, the management makes the employees nervous an aspect that may result to lack of trust on the company management team. The third step will be to personalize employee’s incentives (Stan and Demand 19). This means that IceCool management team will ensure that the benefits and various rewards that the company offers meet the needs of the employees. For instance, for the old employees the company will be focused on providing more health related benefits while younger workers will be exposed to more resting time. Individualizing the needs of the employees is fundamental based on the fact that workers do not have the same needs. The fourth step that IceCool Company will initiate is to allocate significant part of its resources to cater for societal benefits. Since the company aims at providing quality bottled water, it will undertake an extensive corporate social responsibility that includes providing free water to drought stricken areas and refugees camps. In this way, the employees will realize that our product is benefiting members of the society thus making them to be highly motivated. Expected life cycle As indicated earlier, the success of IceCool will be ensured by indicating a time frame for attaining its objectives. To attain adequate resources to cater for the expansion strategies, the company will initiate an extensive promotion of its brand thus increasing its total sales. In this way, it will have enough financial resources to be used in other operations. The table below indicates the time fame of the major activities that IceCool will undertake. Activity Duration Employees recruitment 1-2 years Setting objectives 1-3 months Training of employees 1-5 moths Promotion and advertisement 1-3 years Corporate social responsibilities 1-4 years Establishing new branches 2-3 years Training of employees 1-5 moths Conclusion To mitigate the stiff competition that companies are facing in the local an international market, it is vital to come with an appropriate business plan that indicates how they will utilize the scarce resources. In its endeavor to face its well established competitors, IceCool has introduced a quality product by the name IceCool bottled water that is highly demanded by its consumers globally. To achieve its objectives, the company has adopted an organizational structure that depicts the key management positions and their responsibilities. In addition, the company founders have put in place effective communication strategies and appropriate management styles that will ensure that the company objectives are attained. Key management styles that will be employed under the leadership of managing director include democratic and Laissez-faire style. To ensure that it effectively enter the emerging markets, IceCool has undertaken a SWOT analyses that portrays the major strengths, weaknesses, opportunities and threats that will influence its performance. Through aligning of organizational and management goals, it will be easier for IceCool to attain its goals thus attaining a competitive edge. Similarly, the company has embarked on ensuring that the goals of its employees are in line with the objectives on the company an aspect that leads to high level of motivation as well as employees trust. As depicted by IceCool business plan, all the major company activities including recruitment, training and promotion among others have been allocated an appropriate time frame thus ensuring the company attains its objectives. Works Cited Epstein, J and Jermakowicz, K. Interpretation and Application of International Financial Reporting Standards. New York: John Wiley & Sons, 2007. Print. Robbins, F and Judge, A. Organizational Behaviour. New York: Pearson Education, 2007.Print. Stan M and Demand M. How to Align Organizational Goals to Employee Goals. Available from http://smallbusiness.chron.com/align-organizational-goals-employee-goals-26035.html. Retrieved March 12, 2013. Tannenbaum, R.and Schmidt, W. How to choose a leadership pattern. Harvard Business Review, May/June 1973. Read More