Management for Organizations - Company Valuation of Dunkin Donuts - Essay Example

? Management for Organizations Management for Organizations Question Surf Shop Comparison Both companies have been in their market for about 50 years. Hilo Hattie was founded in 1963 (Hilo Hattie website, Fun Stuff, About Hilo Hattie) while Ron Jon Surf Shop was established in 1959 (Ron Jon website, Our Company, The History). However, through the years the two companies have had different rate of development: today Hilo Hattie has 7 stores across Hawaii (Hilo Hattie website, Fun Stuff, About Hilo Hattie). On the other hand, Ron Jon Surf Shop has managed to significantly expand its presence through partnerships: currently the company has 12 shops but its products are also available in its partners’ sites in Airports, in the Ron Jon Resort, in the Turks and Caicos Islands and so on (Ron Jon website, Ron Jon Partners). Also, the logo of Ron Jon is popular worldwide (Ron Jon website, the History) while the logo of Hilo Hattie is not recognizable at international level. It should be noted that both companies emphasize on the uniqueness and the range of their products, as a competitive advantage towards their competitors. Hilo Hattie is the only retailer in Hawaii that offers to its customers an extremely high range of products. Ron Jon has emphasized on products related only to Surf, aiming to address customers in the specific sector. Specializing on Surf-related products Ron Jon is able to provide to its customers a high range of products of this category. In the websites of the two companies elements can be retrieved in regard to their organizational planning, leading and control. These elements are presented in Table 1 below. Companies/ Element in the website Ron Jon Surf Shop Hilo Hattie Organizational planning In the section ‘Our Company’; employees are highly valued; emphasis is also given on the firm’s corporate environment In the section ‘Fun Stuff’ and the sub-section ‘About Hilo Hattie’; the key target of the company has been its development into a major centre of vacation shopping. Organizing In the section ‘Our Company’ / subsection: History; the company has developed its own stores but it also highly based on partnerships. In the section ‘Fun Stuff’ and the sub-section ‘About Hilo Hattie’; the company operates exclusively through its own stores. Important information on the company’s daily operations are also included in the section ‘Info’; for example, the return of a product is based on the rules included in the Returns & Exchanges sub-section Staffing In the section ‘Careers’; Employee benefits include ‘Employee discounts and Educational Assistance’ Vacancies are presented through the website’s section ‘Contact Us’ and the sub-section ‘Careers’; no information is provided in regard to the terms of employment in the company’s stores Leading In the section ‘Our Company’; emphasis is given on the store’s founder, Ron DiMenna and his leading style which is followed by the stores’ managers; securing fun for customers is among the priorities of the company’s leading aspect (Reilly, Minnick & Baack 2011, p.3) The only information provided in regard to the company’s leading is included in the section ‘Contact Us’ and the sub-section ‘Management team’ Control The control over the selling process is secured through a series of rules including in the document under the title ‘Routine and Compliance Guide’, as updated in Jan 2013; the Guide is included in the section ‘Our Company’ and the sub-section ‘Vendor Info’ The company’s operations are aligned with a series of rules included in the section ‘Info’; for example, customers’ privacy is secured while the terms of Returns and Exchanges are analytically described in the relevant sub-section Table 1 – Organizational elements in the companies’ websites Question 2 Company Valuation - Dunkin Donuts The company’s distinctive competence is its brand name as the most popular ‘chain of baked goods and coffee’ (company’s website, Company Snapshot); the high quality of baked goods can be considered as the core competency of the company. As noted in its website, the company’s vision is ‘to be recognized as a company that emphasizes on responsibility’ (company’s website, Responsibility); in the above case responsibility refers not just to the customer services’ sector of the organization but also to the company’s ethical behavior in general (company’s website, Responsibility). The firm’s values and vision statement helps to shape planning; this fact is verified through the following example: the high range of menu options is part of the company’s vision to be responsible towards its customers (company’s website, Responsibility). In order to meet the requirements of its menu the company has to monitor closely its costs, so that the variety in its products to be feasible. In the future the business would be influenced by a series of internal and external factors, as analyzed below: a) internal factors; a1) advances of IT systems of competitors (Storage Scaler 2013); the company’s existing IT systems should be continuously updated; otherwise the firm’s competitiveness in its industry would be threatened; a2) currently, no specific system or standards of quality control seem to be used by the firm; if the firm continues this practice in the future it could set in risk its market image which emphasizes on responsible behavior towards customers; b) external factors; b1) global economic environment (Reilly, Minnick & Baack 2011, p.13); severe unexpected recessions in the global market (Fox News 2013) could negatively influence the performance of the company’s franchises internationally, as also in the domestic market; b2) ‘competitive forces’ (Reilly, Minnick & Baack 2011, p.13); currently, Dunkin Donuts is considered one of the most powerful firms in its industry, along with Starbucks and McDonalds (Hub Pages 2012). However, it is possible for the firm’s competitors to improve their position or for new entrants to appear; in such case, the firm’s existing customer base would be reduced, a fact that would result to the significant limitation of the company’s profitability. Question 3 Structure for Conglomerates Structural configuration is not quite effective for multiproduct/ multiservice companies. In such companies, a specific type of departmentalization, the departmentalization by strategic business unit, is used (Reilly, Minnick & Baack 2011, p.65); also, the above type of departmentalization is close to the divisional structure configuration. How the following match each other: a) functional structure with simple structure; in the functional structure, a company starts with a specific product/ service and adopts a centralized form of structure (Reilly, Minnick & Baack 2011, p.68); in simple structure, similar business strategy and structure are used (Reilly, Minnick & Baack 2011, p.72); b) divisional structure with departmentalization by product; in departmentalization by product ‘all activities related to a specific product/ service are incorporated in a specific business unit’ (Reilly, Minnick & Baack 2011, p.63); in divisional structure, a business is consisted by ‘a series of units being under the control of the company’s headquarters’ (Reilly, Minnick & Baack 2011, p.74); c) machine bureaucracy with centralized, mechanistic structure; in machine bureaucracy is characterized by high standardization, meaning the use of ‘specific routines in all business activities, including the decision making process’ (Reilly, Minnick & Baack 2011, p.73); in a centralized business, all decisions are taken by the firm’s ‘central management team’ (Reilly, Minnick & Baack 2011, p.67); employees have no power to set their doubts in regard to the orders given to them (Reilly, Minnick & Baack 2011, p.67); d) professional bureaucracy with decentralized, organic structure; in professional bureaucracy, emphasis is given on the ‘exceptional skills of professionals involved in various business activities’ (Reilly, Minnick & Baack 2011, p.73); in the decentralized structure front-line managers are given the power to take critical business decisions (Reilly, Minnick & Baack 2011, p.68). Question 4 Classifying structure 4.1 The small businesses; for example, a hair-dresser (Reilly, Minnick & Baack 2011, p.72) 4.2 The large firms; for example, a firm operating in the automotive industry (Reilly, Minnick & Baack 2011, p.73) 4.3 Firms that are highly depended on individuals with exceptional skills; for example, a library (Reilly, Minnick & Baack 2011, p.73) 4.4 The firms that operate worldwide and which are based on machine bureaucracy; the firm General Motors is an example (Reilly, Minnick & Baack 2011, p.74) 4.5 The firms that are highly based on team-working for the development of various projects; for example, a construction firm (Reilly, Minnick & Baack 2011, p.74) Question 5 Legal Aspects of Staffing 5.1 Fair Labor Standards Act The above Act which came into force in 1938 has secured a series of critical employee rights, such as ‘the 40-hours as limit of a work week, the minimum wage, the overtime payment and a series of restrictions for child labor’ (Reilly, Minnick & Baack 2011, p.85). In other words, the specific legal text includes a series of terms that need to be necessarily incorporated in any employment agreement. 5.2 Unemployment Insurance The Unemployment Insurance is a monetary sum given to employees who have been fired, not because of their own fault (Legal Information Institute 2013). The Unemployment Insurance was introduced with the Social Security Act (1935); within each state different arrangements can be made in regard to this type of Insurance, depending on the relevant state laws (Legal Information Institute 2013). The above Insurance can influence the staffing process in each organization; in fact, because of this Insurance, the firing of employees is made easier since after their dismissal from their position, ex-employees will be compensated for as long they need to be hired to another position. Question 6 Bias in Performance Appraisal A company can attempt to identify and reduce appraisal bias in the following two ways: a) the judgment of supervisors in the context of Performance Appraisal should be reviewed, as of their credibility, by a team of managers, members of various organizational division, not just of the HR department; b) the company’s Performance Appraisal system should not be based only on supervisory judgments but also on the judgment of peers and those of customers (Reilly, Minnick & Baack 2011, p.98). Question 7 Theories of Motivation The concepts of Locke’s Goal Setting Theory can be incorporated in Vroom’s Expectancy Theory: a) the Expectancy Factor of Expectancy Theory could incorporate the first two concepts of Locke’s theory, i.e. the relation of Goals to specific activities and the emphasis on the actions that are most critical for achieving goals set (Reilly, Minnick & Baack 2011, p.133), b) the Instrumentality factor of the Expectancy theory could incorporate the other two aspects of Locke’s theory, i.e. the role of Goals in helping employee to keep focusing on specific tasks and the Use of Goals for developing strategies for completing the tasks assigned to employees (Reilly, Minnick & Baack 2011, p.133). Adam’s equity theory is based on the view that motivation is highly based on ‘perceived inequity’ (Reilly, Minnick & Baack 2011, p.131). The concepts of the above theory could be incorporated in the Expectancy theory in the following way: a) the Expectancy factor of the Expectancy theory could incorporate the Inputs/ Outputs concept of Adam’s equity theory (Reilly, Minnick & Baack 2011, p.132), b) the Instrumentality factor of the Expectancy theory could incorporate the equilibrium concept of Adam’s theory, i.e. the concept that there would be a balance between employees’ inputs and outputs (Reilly, Minnick & Baack 2011, p.132) and c) the Valence factor of the Expectancy theory could incorporate the ‘motivation force for re-establish equilibrium’ (Reilly, Minnick & Baack 2011, p.132), in case that the value of inputs (or else the Valence of the Expectancy theory) is proved lower than outputs. Question 8 Productivity Management The two key concepts presented in the video are: control and perspectives. These two concepts can be parallel to the five functions of management in the following way: Control should be parallel to the Staffing, Leading and the Controlling functions while Planning could be parallel to the Planning and Organizing functions of management. The five functions of management could help me in my personal life in the following ways: a) I would be able to establish clear goals (planning function of management), b) I would become more effective in aligning the goals set with the resources available (organizing function), c) I would understand the terms that I should set for identifying the persons that could help me in achieving my goals (staffing function), d) I would become more willing to take initiatives (leading function) and e) I would understand the importance of checking my performance in regard to the goals set (controlling function). As for the concepts presented, these could help me to become a better leader especially in regard to the following areas: a) the understanding of my personal needs/ potentials so that the goals set are feasible, b) the understanding of the importance of control for achieving the desired goals, c) the understanding of the different types of challenges related to the achievement of goals; in the video under evaluation, these challenges are reflected in the five different modes of perspectives on which personal plans should be based. Question 9 Steps of control The four steps involved in the controlling function are of critical importance since they help managers to check the performance and the feasibility of the schemes incorporated in the business plan. The good understanding of the ratios used by accountants and managers is necessary in order to develop credible assumptions in regard to the actual performance of various business units. Question 10 Changes in Management The staffing function is expected to face the most dramatic changes in the next decade. The rapid development of technology involved in the production process is considered as the key reason for this phenomenon. The management function, which is not expected to have the least amount of change in the next decade, is the planning function. The specific function will always focus on ‘the achievement of organizational vision’ (Reilly, Minnick & Baack 2011, p.85) no matter how many changes will occur in the internal or the external organizational environment. References Dunkin Donuts (2013) Organizational website. Retrieved from https://www.dunkindonuts.com/dunkindonuts/en.html Fox News (2013) Q&A: Fears of a looming 'currency war' threaten fragile global economic recovery as G-20 meets. Retrieved from http://www.foxnews.com/world/2013/02/15/qa-fears-looming-currency-war-threaten-fragile-global-economic-recovery-as-g-20/ Hilo Hattie (2013) Organizational website. Retrieved from http://www.hilohattie.com/aloha/ Hub Pages (2012) Specialty Coffee industry analysis. Retrieved from http://meangreen.hubpages.com/hub/Specialty-coffee-industry-analysis Legal Information Institute (2013) Unemployment Compensation. Retrieved from http://www.law.cornell.edu/wex/unemployment_compensation Reilly, M., Minnick, C., & Baack, D. (2011). The five functions of effective management. San Diego, CA: Bridgepoint Education, Inc. Ron Jon Surf Shop (2013) Organizational website. Retrieved from http://www.ronjonsurfshop.com Storage Scaler (2013) NetApp Revolutionizes Coffee Industry with new FlexPod Solution that Simplifies System, Reduces Cost. 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