Principles of Management and Challenges for Megan - Essay Example

?Case Study Analysis Challenges for Megan Employee retention A detailed insight of the case study suggests that the first main challenge that Megan faces is of employee retention since not only one of the main partners has swapped to the competitors of CAR, but also the past three CEO’s had not stayed at CAR for longer than a year. Increase in market competition Many competitors of CAR have surfaced over the past few years that are gaining the attention of the clientele with their high quality products. Costs and profits CAR’s competitors are offering similar products at better and more affordable prices for the customers as compared to CAR. Megan needs to find out how CAR’s competitors are managing to sell their products at a lower price than CAR. Increase in the need of research and innovation A major problem of the CAR’s products is that they are getting comparatively outdated whereas the customers are looking for latest and innovative designs and features. Change management Last but not the least, Megan needs to manage any change that she makes to deal with the aforementioned challenges so that the strategies she develops are appropriately implemented and yield favorable results. Theoretical analysis Motivation of the employees is one of the most fundamental drivers of their performance at work as well as retention (Sandhya and Kumar, 2011, p. 1778). According to the Employee Retention Model, organizations need to understand what the employees like and what they do not like in order to retain them (Howatt, n.d., p. 5). While employees differ in what they like and dislike, an organization should address the needs of the masses; the most important needs and concerns that must be addressed at priority are the ones that are common. Once things have been adjusted in the big picture, it becomes practicable and more convenient as well to address the needs and concerns of individual employees. The classical theory of perfect competition adopts a reduced-form approach in that it determines competition’s outcome rather than the actual activity of competition (Stigler, 1965). One of the critical features of practical competition is the potential rivalry force (Witteloostuijn, 1992). According to the Oxford English Dictionary’s definition of the word competition, competition means “[r]ivalry in the market, striving for custom between those who have the same commodities to dispose of” (Newman, 1989, p. 3). In this sense, a perfect competitor actually does not do any competition. The strive for custom is the action of competing and is a dynamic process. A firm that is perfectively competitive accepts the market price passively rather than paying heed toward what the rest of the companies are doing in the industry. There is an assumption of the rivalry in the market in all cases. On the other hand, the new models of game theory visualize competition as a strategic decision-making process that is under uncertainty. These models depict the engagement of firms and people in competition. For instance, “an important aspect of competition neglected in the models of perfect competition is the public revelation of private information held by individuals” (McAfee and McMillan, 1996). Solution for Employee retention Megan needs to conduct a survey to obtain the employees’ views on what are their expectations from the organization, what their needs are, and what aspects of the organization are disliked by them. Apparently, the case study suggests that the biggest problem is with the sales department, so Megan should start over with the sales department first because conducting a survey of an organization with 3500 members is quite time-consuming and taxing. Megan should identify the common needs and areas of concern and do the needful to address them at the earliest. Some of the ways in which Megan might be able to easily address their needs and concerns include providing the employees with team building trainings, increasing recognition, carrying out the culture inventory of the organization, and implementing 360 degree evaluations for all (Riley, 2009, p. iv). These measures would help Megan raise the level of motivation of the employees which in turn would optimize their tendency of retention. Short-term solution to other problems To compete with other companies in the market, the first step is to know who the competitors are. “A guideline that I use is that if a nearby hotel's rates are usually within 30% of mine-higher or lower-they are a direct competitor” (Manderfeld, 2012). Once the competitors have been identified, Megan needs to build affiliation between CAR and its competitors. The usual mistake made by companies is that they see their competitors as their enemies and tend to turn a blind eye and deaf ear to whatever is happening at their end. Unless a company explores its competitors in depth, it is not possible for it to identify in what potential ways do the competitors pose threats to it. The golden principle of success in this regard is to know that the competitors are not enemies. If dealt with in the right way, the competitors of a company can turn out to be its most fundamental source of customers. CAR needs to treat its competitors with consideration and respect. Megan should get in touch with the top management of the Chinese companies and try to get the information about how they are able to sell the products at a better price. Megan can achieve objective results in a very short span of time by first bringing itself to the level of innovation displayed by its competitors. This can be achieved by buying the products of the competitors of CAR and seeing in what potential ways has the design been changed and enhanced to catch the attention of the clientele. Megan should carefully examine the innovative features and aspects and make every possible effort to incorporate elements of the like into its own products. Even if it is imitation and as long as it is within the legal boundaries, the idea is very good because the customers would be getting newer designs and product features from CAR. Long-term solution to other problems While adopting the strategies of the competitors might yield favorable results in the short-term, the long-term consequences of this practice are disastrous as has been noticed in many cases in the past. For example, the fountain pens kept losing market share and almost reached a point where they were about to extinguish from 1951 to 1973 because during this period, they had focused their efforts at competing with the ballpoint pens (Modis, n.d.). It was only since 1974 that prices of the fountain pens began to rise again since their strategy had, since then, retreated into noncompetition. This implies that in order to achieve success in the long run, CAR must focus its energies on introducing innovative products at reasonable prices to the customers rather than constantly imitating or competing with its rivals in the market. Only those companies survive and thrive over the passage of time that have a vision of their own and that have clear goals established in front of them instead of the ones that keep trying to catch up with the competitors. To achieve this, Megan needs to create innovative features in CAR’s products. There can be two approaches to it and Megan can use either of the two or both at the same time; Megan should encourage the design and manufacturing department to experiment with new designs and come up with new products or Megan can directly obtain the customers’ expectations via surveys and research. Megan needs to increase the budget for research because realization of the changing and modifying needs of the market is the first step forward in the way of making innovative products that provide a company with competitive advantage. This would provide CAR with a clear direction on which it can focus its resources and thus develop products that address the needs and meet the expectations of the customers. Change management While Megan has all the aforementioned challenges and the potential solutions in her mind, she is not able to effectively implement her strategies until she has complete support of the organizational personnel. To obtain their full support, the first thing that Megan needs to do is to take them into confidence that as a CEO, she would try her best to lead them as well as the company they make part of to success. Since she is a newly formed CEO, one such meeting with the employees would not only serve as a formal introduction of the new CEO to the employees, but would also boost the morale of the employees. Megan should clearly state what she expects of the employees. This is also called as the Pygmalion effect and plays a very important role in how the employees perform at work. “The way managers treat their subordinates is subtly influenced by what they expect of them” (Gabarro, 1992, p. 179). As a result of the Pygmalion effect, the staff responds to the message of the manager by trying to come up to the manager’s expectations (Heathfield, 2012). The next thing that Megan needs to do is to tell the employees how important is change at this point in time when CAR is subject to both internal and external threats of various kinds. Megan should particularly refer to the partner who has joined the competitors as well as the growing competitors from China. Top management needs to spread the awareness about all sorts of threats at all levels in an organization so that the subordinates not only comply with the managers’ instructions, but also know why they are being asked to behave in a certain way. Finally, Megan should discuss in what potential ways would the increased profitability of the business that would thus result, would benefit each and every employee of CAR. Conclusion As the new CEO of CAR, Megan faces a lot of challenges and internal as well as external threats to the company. To deal with these challenges successfully, Megan needs to create several changes both within CAR as well as its interaction with its competitors. Her basic strategy should be to keep the workforce motivated and ready to endorse and implement changes within the organization whereas outside the organization, Megan needs to consider the on-going trends in the competitors and carry out a comprehensive study of the customers’ expectations so that Megan can outline the way to achieve those goals. There are a lot of complications in the organization at the present stage, but with proper management, they can be simplified and resolved. References: Gabarro, JJ 1992, Managing People and Organizations, USA: Harvard Business School. Heathfield, SM 2012, The Pygmalion Effect: The Power of the Supervisor's Expectations, viewed 16 December 2012 at http://humanresources.about.com/od/managementtips/a/mgmtsecret.htm. Howatt, WA n.d., Employee Retention: A Discussion Model, Howatt HR Consulting Inc. viewed 16 December 2012 at http://www.howatthr.com/images/pdf/pplmgmt/Employee%20Retention%20A%20Discussion%20Model.pdf. Manderfeld, J 2012, Are You Managing Your Competitors or Are They Managing You?, Hotel Business Review, viewed 16 December 2012 at http://hotelexecutive.com/business_review/1368/are-you-managing-your-competitors-or-are-they-managing-you-seven-effective-ways-to-stay-on-top. McAfee, RP, and McMillan, J 1996, Competition and Game Theory, viewed 16 December 2012 at http://www.mbs.edu/home/jgans/agt/papers/mcafeemktg.pdf. Modis, T n.d., A scientific approach to managing competition, viewed 16 December 2012 at http://www.aip.org/tip/INPHFA/vol-9/iss-1/p25.html. Newman, J 1989, Competition in Religious Life, Volume 11, Canada: Canadian Corporation for Studies in Religion. Riley, BK 2009, Employee retention: an empirical study of direct care employees at achieve, Binghamton University: State University of New York, viewed 16 December 2012 at http://www2.binghamton.edu/ccpa/public-administration/current-students/capstone/Bridget%20Riley.pdf. Sandhya, K, and Kumar, DP 2011, Employee retention by motivation, Indian Journal of Science and Technology, Vol. 4, No. 12, pp. 1778-1782. viewed 16 December 2012 at http://www.indjst.org/archive/vol.4.issue.12/33-dec11sandya.pdf. Stigler, GJ 1965, “Perfect Competition, Historically Contemplated” in Essays in the History of Economics, Chicago: University of Chicago Press. Witteloostuijn, A 1992, Theories of competition and market performance, De Economist, Vol. 142, Issue 1, pp. 109-139, viewed 16 December 2012 at http://link.springer.com/article/10.1007%2FBF01849806?LI=true. Read More