Strategic Objectives of the Business - Essay Example

? REPORT – HRM CASE STUDY Table of Contents 1Purpose of Report 3 2 Introduction 3 3 Strategic Objectives of the Business 3 2. Discussion of findings from SWOT and PESTLE analysis – Problems and Challenges 4 2.1 Problem/Challenge A – The Global Economic Downturn 4 2.2 Problem/Challenge B – Employee Dissatisfaction 5 3. Discussion of findings from SWOT and PESTLE analysis – Strengths and Opportunities 6 3.1 Strength/Opportunity A – Organizational Culture 6 3.2 Strength/Opportunity B – Effective Diversity Management 6 4. Suggested Actions 7 4.1 Action 1 7 4.2 Action 2 8 5. Conclusion 9 1.1 Purpose of Report The purpose of this report is to critically analyze the business operations of ‘High Street Heaven’ which is a high street retail store chain that has proved to be quite successful. Owing to the global economic scenario however, the retailer has been experiencing difficulties and facing problems in meeting its strategic goals. 1.2 Introduction The first part of the paper will discuss the problems being faced by High Street Heaven in meeting its strategic objectives, this discussion will be followed by recognizing the areas of strength for the retailer as well its opportunities. In conclusion, the report will put forward applicable plans of action and recommendations that are backed by extensive research and literature to suggest what the business can do in order to address its organizational issues. These recommendations and suggestions will specifically be in the context of how the Human Resources division of the business can contribute in tackling the challenges being faced by the organization. 1.3 Strategic Objectives of the Business Before the problems and challenges being faced by High Street Heaven are identified it is important to establish the strategic objectives of the business, according to Bartol and Martin (2005) objectives and goals that are said to be strategic are extensive aims that are developed by the top management. Shrivastava (1987) suggests that the importance of these objectives is such that they include fundamental aspects related to the survival of even the most prolific businesses; therefore, the setting of strategic objectives is not only limited to small and medium enterprises but each and every organization, regardless of its size and scale of operations. From a market standing High Street Heaven seeks to focus on growth and expansion by stepping into the markets of 8 major cities in the United Kingdom by 2017. In analyzing the problems and challenges that the achievement of this strategic objective faces, it is imperative that the organizational and environmental factors of the retailer that are posing probable challenges should be analyzed. 2. Discussion of findings from SWOT and PESTLE analysis – Problems and Challenges A SWOT helps managers to understand the threats and weaknesses of a business along with its strengths and opportunities (Bartol and Martin, 2006). Anthony (2008) adds that another important tool in the overall assessment of the general environment is that of the PESTLE analysis, which focuses on political, economic, social, technological, legal and environmental factors that have a significant impact not only on the operations of a business but in the achievement of its strategic objectives. As this part of the report focuses mainly on the challenges being faced by the High Street Heaven, the threats and weaknesses of the organization would be assessed first along with an understanding of the shape of its general environment. 2.1 Problem/Challenge A – The Global Economic Downturn From an external perspective, the business faces the global economic downturn which poses a grave threat to the prosperity of the retailer and its plans for expansion. Sloman (2005) reports that an economy in recession sees minimal growth or no growth and in turbulent scenarios the prevailing economic situation can even cause the overall output to diminish. This certainly is an alarming situation for the high street retailer owing to its primary objective of expansion and growth. Another economic and financial challenge that the business faces is that of a 15% decline in profits in some of its most impacted stores, in addition to towering expenditures because of a 35% reduction in overdraft and a 7% increase in loan repayments by its major lender, Lloyds TSB. Therefore, High Street Heaven has been hit most significantly by mounting economic and financial pressures which have led the business to implement several cost-cutting procedures. The retailer’s austerity measures have had a major impact on its workforce, such that external recruitment has decreased or has completely stopped in some regions. The management is focusing more on seasonal contracts, which reflects that perhaps High Street Heaven can no longer afford to employ full-time staff. 2.2 Problem/Challenge B – Employee Dissatisfaction Above all, internal issues within the organization such as staff dissatisfaction on aspects of decision-making and lack of promotion opportunities means that the Human Resources department must step in to ensure that variables related to organizational behavior which dictate the overall effectiveness of individuals, groups and the organization as a whole, such turnover and absenteeism (Robbins et al. 2010) remain under effective control. The staff turnover rate at High Street Heaven is highly alarming since it is above industry average. Moreover, High Street Heaven should also consider and assess the implications of employee outsourcing, Mclvor (2005) argues that when businesses decide to outsource, they must consider all the dimensions related to the concept, for example, studies show that in comparison with peripheral outsourcing, the effects of core outsourcing on employee performance were pessimistic while, the former generated more promising results. 3. Discussion of findings from SWOT and PESTLE analysis – Strengths and Opportunities This part of the report will assess the positive aspects of High Street Heaven, to determine what areas of the organization can be worked upon and developed in order to improve the overall effectiveness of the business. 3.1 Strength/Opportunity A – Organizational Culture Most importantly, the management of the high street retail business appears to have adopted a highly proactive approach in planning the establishment of its future stores. The organizational culture of the business appears to promote the development of an employee-oriented and customer-oriented approach, as its core value postulates the premise of respecting one another. Moreover, it should also be noted that in endorsing an employee-centered image, High Street Heaven has successfully managed to achieve a significant degree of job satisfaction amongst its workforce as suggested by the positive employee evaluation score on predictors factors such as access to training, working environment and teamwork which according to Barling et al. (2003) are predictors of job satisfaction. 3.2 Strength/Opportunity B – Effective Diversity Management The organization wishes to endorse diversity in the workplace, according to Holladay and Quinones (2008) diverse organizations are able to benefit from gaining insights and helpful perspectives from different employees which leads to an overall enhancement in the performance of the business. The recognition of the need for a diverse workforce is a strength of the business, as it shows that the management understands how the incorporation of deep-level diversity into the organization can help the business achieve its strategic objectives of growth and expansion into other markets in the UK. 4. Suggested Actions In order to successfully deal with the current business situation, the retailer must develop and executive plans of action to ensure that its long-term objectives are not distorted by any external variables in the macro environment and also those within its internal environment. It is suggested that the business follow the recommendations presented below. 4.1 Action 1 The ongoing scenario is best understood when dividing the business’s dimensions and suggesting proposals that are backed by research and evidence. Firstly, the HR department should concern itself with the evaluation of the outcomes of the employee satisfaction survey. While, Barling et al. (2010) confirm that predictors such as training, teamwork and the working environment itself are pivotal to enhanced levels of job satisfaction, HR managers would have to develop effective and workable programs to incorporate greater opportunities for employee involvement in decision-making. Robbins et al. (2010) report that employee involvement proposes the implementation of participative processes that allow greater worker input in decision-making, Takeuchi et al. (2010) found that the application of such high performance work systems garnered highly positive results by enhancing worker productivity, organizational commitment and job satisfaction. As reported by Datta et al. (2005) participative management models have also contributed towards overall organizational performance by enhancing worker productivity thereby, reducing costs and diminishing turnover rates, which is the most important implication of the employee involvement model on High Street Heaven as the business is currently facing a 17% staff turnover which is higher than that of industry averages. Employee dissatisfaction resulting from lack of promotion opportunities may also be seen as a failure of the management to establish organizational justice; perhaps, employees feel that the lack of advancement opportunities fails to reflect the worth of their input in comparison with others (Adams, 1965). This assumption is plausible on the basis that employees seek to rewards on the basis of what they deliver, therefore, workers at High Street Heaven maybe feeling under-rewarded. 4.2 Action 2 Lastly, the HR department at High Street Heaven must understand the need to implement effective diversity management programs, this strategy suggests that in order to advance and expand into other markets within the UK, the retailer should design a program which can successfully manage the recruitment and retention of well-suited and diverse employees. Pomeroy (2007) notes that the success of the Retail Leadership Development (RLD) program executed by North American retailer Safeway represents that responsibility in diversity programs is highly important, such that, employees who exclusively meet the goals of diversity should be praised and rewarded. The results of the RLD program should an increase of 31% in female managers of Caucasian ethnicity while, African American female store managers galloped by 92%. High Street Heaven’s statistics show that despite of the initiative taken by the management to promote diversity, the percentage of female staff at managerial posts has decreased consistently. This view suggests that the retailer should also put into place effective diversity management programs to realize its strategic objectives. Moreover, the organization should focus on aspects of deep-level diversity rather than surface-level diversity which is gender based, as Black and Holden (1998) conclude that gender is not a relevant variable in the analysis of worker productivity, therefore, the organization must focus on the implementation of diversity which encompasses values, personality and perceptions (Philips et al. 2006). 5. Conclusion The discussion leads us to conclude that the role of the Human Resources department in the achievement of High Street Heaven’s strategic objectives and goals is imperative. The ongoing economic crisis has adversely impacted the opportunities of the high street retailer as its employees must now face challenges that are expected to be brought about by austerity measures. Therefore, it should be noted that in times of crisis, which is bought by changes in an organization’s external and internal environment it is the employees that have to face pressures to adjust and adapt to drastic alternations in situations. Henceforth, the Human Resources department should adopt a proactive and practical approach in dealing with unforeseeable circumstances to ensure that the long-term objectives of a business are not compromised. APPENDIX SWOT ANALYSIS STRENGHTS Proactive management Employees satisfied with training, working environment and teamwork Employee and customer-centered core values Community-based organizational culture Motivating workplace environment Prevailing importance of diversity in workplace Good quality Excellent customer service Reasonable prices WEAKNESSES Worker dissatisfaction regarding involvement in decision-making Lack of growth opportunities for employees Staff turnover rate is higher than industry average Decline in profits at Swansea and Newcastle stores by 15% Company growth is slowing OPPORTUNITIES The global economic downturn has also negatively impacted competitors Moderate growth expected in next 5 years THREATS Uncertain economic situation Lloyds TSB has decreased overdraft and increased monthly loan repayments PESTLE ANALYSIS POLITICAL ECONOMIC SOCIAL Government measures to combat the global economic downturn Global and national economic downturn Decline in business growth Changing policies of lenders e.g. Lloyds TSB Customer preference of value maximizing goods Poorer regions more affected by economic downturn e.g. Swansea, Newcastle TECHNOLOGICAL LEGAL ENVIRONMENTAL Advancements in production methods Legal barriers and implications of expansion Laws and regulations in cities where the business expands As a customer-centered business, the retailer can focus on eco-friendly products BIBLIOGRAPHY ADAMS, J. 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