Business report based on the a given case study. Highland Limited - Essay Example

? Business report based on the a given case study Contents Business report based on the a given case study Contents 2 Question 3 Question 2 5 Question 3 8 Question 4 11 Question 5 13 Reference 15 Bibliography 16 Question 1 With reference to the case study, comment on the legal framework the organisation has adopted providing an explanation as to why the organisation has developed in the way that it has over the years. Evaluate those factors the organisation will need to consider in reviewing its mission statement, goals and business plans for the future. It has been proved that smaller firms are more prone to failures than larger firms. Thus it is essential for every business to understand the terminology which is used in legal framework to regulate business. The legal framework is essential to ensure that the creditors are not exploited. Legal framework is reflected through statistics which are provided by the government and also by some private organisation (Storey, 1994, p.78). Highland Limited initially started as independent outdoor pursuits but later the director of Highland limited Frank Rose began to manufacture outdoor protective garments. He did have a fair knowledge of design and make up but due to lack of business expertise and with his occupation as a teacher he did not have enough time to devote himself to the business. Frank in order to repay the loan had to sell of his centre at Shiel Bridge. Frank Rose took help from his wife Fiona and Andrew Robertson who were willing to put in funds and thereafter Fiona and Andrew took over the running of the business. Frank Rose concentrated more on the Outdoor Centre while Fiona looked after the accounts and Andrew became the Managing Director. The business operated from small cottage. The company moved into a new location in April 2008 and one of the main customers of Highland Limited, Weir’s of Glasgow made the company big enough to get viable. The relationships between the staff were informal. But steadily the employment increased post November 2008. The company did not have enough resources to meet the demands of the market and thus the company did not make any attempt to attract new customs. Approaches to retailers were discouraged as Andrew Robertson believed that until they had the capacity to satisfy the demands of the market it would not be profitable to go to the retailers. The company faced a twist when it had started operating with Stoner garment, a brand of western Oil Limited. The company was eager to supply waterproof and protective clothing to the lucrative market of about 2000 workers. This provided Highland Limited with an advantage as being a local supplier the company would be able to produce jackets according to the demands and deliver at a minimal time. Therefore Highland Limited together with Stoner Garments decided to design jackets which would be acceptable to Western Oil in terms of both quality and price. Therefore by providing garments to the Western Oil the company was able to achieve success and the legal framework adopted by the company was applying the norms and regulation. Highland Limited was a company in which philosophy and raison d’etre mattered a great deal. The company realised that although the company objectives was to maximise the profits there were also secondary objectives which the company also wished to pursue. The objectives were embodied in the company’s philosophy but never written down. There was difference in the way people saw the philosophy. Thus the factors that the organisation needs to consider in reviewing its mission statement, goals and business plans for the future is firstly the company needs to develop a mission statement, a mission statement is only the starting point of the organisation. Next task is to identify a set of goals which would accomplish the organisations missions. The company needs to establish one year plan, three year and five year plan for expanding its market share in the market. Thus to achieve the goals the company have to develop short term objectives (Shelly, et.al, 2009, p.53). Therefore before implementing the changes Highland Ltd needs to ask question like how and why it needs to apply the changes. The basic reason being the company should be able to keep up the ongoing trend in the market so that the demand for their product increases. Question 2 With reference to the case study, prepare a detailed PESTLE and competitor analysis of the external environment. A PESTEL analysis is used to analyses the company’s environment. It is one of the strategic tool which helps to discover the market growth potential, the desired potential and direction for the company and strategic positioning. It is important to analyse the macro environment which in turn helps in determining the factors that might affect the organisation in the future. Therefore the factors include political factors, economical factors, social factors, technological factors, environmental factors and legal factors. The PESTEL helps to determine possible changes and tries to estimate the scope in which the changes are most likely to take place and the potential consequences for the company (Gorgenlander, 2011, p.15). Political Factors: The Company, Highland Limited is based on Scotland. The company first started operating at Shiel Bridge and then moved to Loch Kishorn on the beautiful Apple cross peninsula. The company started to operate with Western Oil Ltd. Thus the business is based on Scotland. One of the important factors of Scottish political system is that its small size enables the policy formulators to personally know each other. Thus the negotiation between the local authorities and the state government has the advantage of proceeding quickly in Scotland (Kellas, 1989, p.233). Because of the liberal and steady political conditions Highland limited can easily perform its business without any restriction from the ruling government. The Political conditions seem to be stable which adds on to the advantage of any business to flourish and successfully generate business. Economical Factors: The economic conditions of UK seems quite stable as UK is the sixth largest economy in the world and is one of the major international trading power. The economy is highly developed, is market based economy and diversified with an extensive social welfare services which provides most of the resident with a high standard of living. The economy has managed to recover from turmoil in the financial market (US Department of State, 2011). Highland limited was not economically stable at it stated its business with a low amount of cash. When the business shifted from Shiel Bridge, the director of the company Frank Rose did not have enough capital to set its business. Frank Rose had to sell of his centre at Shiel Bridge in order to repay the loan taken by Frank initially to raise the business. He was financially supported by his wife Fiona and Andrew Robertson. The company did not have enough resources to meet the demands of the markets, and also hired fewer employees. The hiring of the employees increased post November 2008 and after the company started to work in collaboration with Western Oil Limited for its brand Stoner Garments, the economic conditions improved drastically. Social Factors: Scotland has been seen as an opportunity in terms social welfare and the ministers must work with these social partners to develop and implement a modern strategy for Scotland (Stuc, 2007). In the case of highland Limited the social factors were not stable. There exists a low and informal relationship between the staff. Also a very small number of employees were hired initially. The company did not follow any formal mission and objectives. Thus there exist very low social factors for the company. Technological Factors: The Company did not use any modern technology; it still depended on manual labour. The company employed a skilled and competent machinist named Judith Harling. Although the company hired 14 more new employees but Harling was the most competitive one. He was the only supervisor directing the other 14 machinists. The cutting department was under the control of David Gosnold who was a cutter and a designer. The garment manufacturing followed three processes which were cutting, machining and packing. Environmental Factors: The Company initially started its business at Shiel Bridge and then moved into a small rented accommodation in Inverness. After the company started working for Western Oil Ltd, the Company expanded to occupy all the tenement floors in the Inverness building. The company acquiring to new premises felt that it would provide the ideal environment for the company to take off and became successful. Legal Factors: The Company tried to follow the legal factors and avail with the rules and regulation of the Government. Competitors Analysis Competitive strategy involves the positioning of the business in order to maximise the value of the capabilities which would help the organisation to distinguish itself from the competitors. The main objective to determine the competitor’s analysis is to develop a profile of the strategic changes that the competitors might take in the future. But sometimes the competitors cannot be analysed in a systematic manner. The organisation tends to know about the competitors because it competes with them on a daily basis. A complete and in dept analysis of competitors usually requires a great amount of data. Most of the companies do not collect information about its competitors on a systematic basis but through informal basis. There are four components which help to analysis competitors and they include future goal of the competitor, their current strategy, capabilities and assumptions (Porter, 1998, p.47). In the case of Highland Limited there is no specific information given about its competitors and its strategy. Thus it is assumed that Stoner Garment was its competitors. Highland Limited started to work with Western Oil only after being collaborated with Stoner Garment. Highland limited has set its production by paying commission fee to Stoner Garments but invoicing and delivering directly to the construction site. The orders came directly from the western Oil Ltd and it was assumed that Stoner was completely ignored and a local myth was set up that Mr and Mrs Robertson had concerned the market for waterproofs jackets at Kishorn. Question 3 Organisation culture is often defined as “the way things are done around here”. Describe, using the ‘cultural web’ model, the current culture at Highland. What changes to the culture and organisational structure do you recommend the management of Highland make, so as to improve morale and performance? The organisational culture is often defined as ‘the way we do things around here’. The drivers of the meaning of culture are multiple. Culture is deeply embedded in the overall system of the organisation (Carleton & Lineberry, 2004, p. 31). The cultural web model helps an organisation to understand the paradigm in a more concrete and definite way and while doing this it offers an in-depth complexity of the change that took place. The underlying assumptions which are to be changed are mostly found in the described part of the organisation. Figure 1: The Cultural Web (Source: McCool & Moisey, 2008, p.131) The first part consists of routine which depicts the way members behave within the organisation as well as outside the organisation. Second part contains the rituals, which includes both the formal as well as the informal organisational processes which occur in the daily in the organisational life. Third part includes stories, which deals with the things that have already taken place in the organisation and providing the employees with a common experience of the events. Fourth is the symbol which is and can be seen directly such as logo of the Company, or certain reward system which the organisation follows. Fifth constitute of the power structure which takes into consideration the individuals or the groups setting which directs the most essential and important assumptions. The sixth part is the control system which mainly focuses on the members of the organisation and on the common beliefs of the members. Finally the cultural web consists of the organisational structure which involves the hierarchies and the relationships between the employees. The Paradigm is the non visible part of every aspect; it is generally taken for granted among the members of the organisation (Anonym, 2007, p.26). The current culture of Highland Limited can be analysed with the help of the cultural web. Highland Limited culture includes routine where the behaviour of the employees could be analysed. Rituals include the both formal and informal organisational process. This is because the company does not have a formal organisational process; it still practises an informal process. The company can tell stories of its operation and which would help the members to work effectively. The company does not have any company logo so it can create a logo and follow the fourth part of the cultural web which is symbol. The fifth, sixth and the last part of the cultural web deals with the process of the organisation, power structure and the organisation. Thus highland limited must take into consideration these three parts as it has been noted that the company does not have a good relationship structure between the members. Culture is an important part of a company, therefore while implementing strategic changes culture must be given high priority. It is recommended that Highland Limited should adopt the Strategy Culture Matrix. This matrix would help the organisation to understand the relationship between its strategy and culture. The four essentials in determining the culture of an organisation are Manage the change, reinforce the culture, Manage around the culture and to change the strategy in order to fit the culture. The matrix would influence the organisation to manage its strategic change in terms of culture (Brown, 2006, 464). Figure 2: Strategy-Culture Matrix (Source: Brown, 2006, p. 465) The first and foremost thing the company should do is to create a logo. A logo is very important for a company it is a symbol that generates awareness in the minds of the customers. By creating a logo the company would be able to follow the fourth part of the cultural web. The power structure of the organisation is not strong enough thus the director of the company needs to implement new and effective rules so to enhance strong power. Lastly the work culture of the organisation does not seem to be lively and the members do have a healthy work relationship. Thus for the company to achieve success it is very necessary to develop a healthy relationship between the members of the organisation and also introducing a form of reward for the most desirable and efficient employee. This would increase the moral of the employees and would motivate them to work efficiently. Question 4 What shortcomings exist regarding the operations and working practices within the firm, which are having adverse effects upon product quality and levels of customer satisfaction? In addition, they are hindering innovation and new product development which is seen as vital for securing new markets and thus, ensuring the future success of the company. Highland Limited, during the initial days of its business did not invested into new designs or innovations and Frank Rose contact with the manufacturing side of the business was almost nil or minimal. The company had employed only one competent and skilled machinist by the name Judith Harling. By the end of November employment increased at steady rate. Also the company was experiencing limited resources for which the company was not able to meet the demands of the market. The company did not approach to the retailers because Andrew Robertson had a perception that it was no use investing into the market until and unless the company had resources. As the company progressed, it had secured a new advance factory of about 6000sq ft by the end of 2009 and decided to occupy from 2010. Despite of its success the company did not have a common goal, objective and mission. The objectives were numerous and each member looked upon the objectives according to their desire. The Company had only one supervisor and when need arises Judith Harling was assisted by another full time machinists Mari Graham. Another important issue relating to the members of the organisation was that since few of its employees did not show good temperament such as Mari Graham and it was due to this factor that one or the other would burst into the mangers office and would threat to resign. This affected badly the work culture of the organisation. As with regards to the cutter, Mr. David was not a pattern cutter and it was often noticed that the work which he had done was of poor standard and caused the machinist difficulty. The machinist blamed the cutter and Mr David blamed the quality of machining which was cause by girls rushing on piecework. Arguments among the concerned departments often resulted in conflicts. Before the company moved into the new factory, in the old premises five people shared a tiny room which had made work much difficult. The company also encountered problem with the costing and wage department. Therefore the above was the short comings that the company had faced during its operation. Question 5 Where structural and operational changes need to be made, consider any barriers the management team may face as they try to implement changes? Evaluate the methods could they use to overcome such barriers. The Company needs to make some changes into its structural and operational factors. The Company has a very informal structure which needs to be changed and a new structure needs to be implemented. For an effective organisational structure, the company needs to hire Human Resources manager which would help the company to develop an effective organisational structure. The management team might try to implement changes but since the company has been practising its core values over the years it would be easy for the company to adapt to the new changes at an ease. The main issue lies with the costing and wage payment. The rate did not reflect the job content and few problems were identified. Thus in order to provide effective changes in the operational structure, the company should have agreed to a specific method which would not allow rates to drift. One method of wage deferential must be adopted which would be applied to similar kinds of jobs. The work assigned must be equally distributed. With regards to the operatives, there exist two basic rates. One was the basic rate of 4.42 Pound per hour and the other consists of 5.93 pound per hour were paid to women only when they made certain kind of high quality jackets. The issue was that some girls got only the basis rates not because of their inability to perform the work but because the company did not have enough piecework to do. Thus this system should be changed and an equal distribution of wage must be implemented. The indirect workers were also paid on a day rate basis who was unsatisfied with the payment procedure. Thus the company needs to implement these changes. Change is an important form of an organisation and innovations are vital for a healthy organisation. Two vital aspect of change in organisation are changing technologies and products along with changing people and culture. Therefore Highland Limited must use the innovation strategies like cooperation, exploration and entrepreneurship. People and culture changes depend on the behaviour, skills and attitude of employees. Highland Limited should involve training and organisation development which are important to change the mind set and the culture of the organisation (Draft & Marcic, 2010, p.279). Reference Anonym. (2007). Effects of New Business Models on Organizations in the Field of Student Tutoring. GRIN Verlag. Brown, D. R. (2006). An Experiential Approach to Organization Development. Pearson Education India. Carleton, J. R. & Lineberry, C. S. (2004). Achieving post-merger success: a stakeholder's guide to cultural due diligence, assessment, and integration. John Wiley & Sons. Draft, R. L. & Marcic, D. (2010). Understanding Management. Cengage Learning. Gorgenlander, V. (2011). A Strategic Analysis of the Construction Industry in the United Arab Emirates: Opportunities and Threats in the Construction Business. Diplomica Verlag. Kellas, J. G. (1989). The Scottish political system. Cambridge University Press. McCool, S. F. & Moisey, N. (2008). Tourism, recreation, and sustainability: linking culture and the environment. CABI. Porter, M. E. (1998). Competitive strategy: techniques for analyzing industries and competitors: with a new introduction. Simon and Schuster. Shelly, G. B. et.al. (2009). Systems Analysis and Design. Cengage Learning. Storey, D. J. (1994). Understanding the small business sector. Cengage Learning EMEA. Stuc. (2007). The Future of Manufacturing Industry in Scotland. [Online]. Available at: http://www.stuc.org.uk/policy/economic-industrial-policy/discussion-papers-series/the-future-of-manufacturing-industry-in-scotland. [Accessed on January 4, 2012]. US Department of State. (2011). Background Note: United Kingdom. [Online]. Available at: http://www.state.gov/r/pa/ei/bgn/3846.htm. [Accessed on January 4, 2012]. Bibliography Lynch, P. (2001). Scottish government and politics: an introduction. Edinburgh University Press. Mooney, G. & Scott, G. (2002). Exploring social policy in the 'new' Scotland. The Policy Press. Read More