Different Challenges to Different Organization - Research Paper Example

Different Challenges to Different Organization TABLE OF CONTENTS Different Challenges to the company…………………………………………….3 Management Models for Assessment of environment…… …..…………………4 BMW COMPANY Introduction……………………………………………………………………….5 Credit Crunch Challenge faced by BMW………………………………………...6 CLUB MED Introduction………………………………………………………………………..7 Climate Change Challenge faced By Club Med…………………………………..8 BRITISH AEROSPACE COMPANY Introduction………………………………………………………………………...9 Corporate Social Responsibility of BAS………………………………………….10 GREEN KING Introduction……………………………………………………………………......11 Business Ethics by Green King……………………………………………………12 REFRENCES……………………………………………………………………..13 INTRODUCTION TO CHALLENGES: In this fast moving global business environment, the Company faces many challenges while creating opportunities and to increase the yield for the owners. The type of challenges the company faces are economical and financial crunches, environmental issues, social responsibility of a corporate or a Business Ethics. What ever the issue or challenge is the company faces tough time due to such constraints. And the company needs effective strategy to overcome such challenges without harming its repute. CREDIT CRUNCH CHALLENGE: Due to the economic recessions, most of the companies around the world faces severe credit crunch. The Credit crunch means the economic return of the over all company curtails due to number of factors. This could be because of recession where the overall business activity slows down. This result in low purchasing power of the consumer and those companies which specialize in luxurious items faces major hit back. This results in low demand, low sales, and low profit and over all low earnings by the companies. CLIMATE CHANGE CHALLENGE: Due to global warming, many changes have been occurring slowly and gradually which affects adversely the company’s position and stability. For those companies which are involved and specialized in tourism based services especially on beach locations greatly affected by such crucial natural situations. The Climate Change means the rapid increase in the temperature of the world which leads to other climatical factors. These factors are increase of intense cyclones, air temperatures, and rise of water level in the sea. These are the challenges faced by tourism countries. CORPORATE SOCIAL RESPONSIBILITY CHALLENGE: Any company no matter what kind of business it deals with, are equally liable for some social responsibilities. It means that the company should meet the some corporate regulations, international norms and ethical standards. The Business should promote the best interest of the public and should be for the growth of the community. It should be responsible for all those activities which have impacts on environment, communities, employees and consumers. The company should not be deliberately involved in illegal or harmful practices. BUSINESS ETHICS CHALLENGE: Business ethics means that the company follows the ethical principles while engaged in business activities. It applies on the conduct of business as a whole and as a individual. It applies in all fields such as medical, technical, legal and others. In this 21 century, the demand for business ethics in process and actions is increasing. The new public initiatives and laws are introduced to bring the improved business ethics followed by the business and avoid short term gains by acting in unethical ways. MANAGEMENT MODELS IN ASSESSING THE ENVIORMENT: Management models are tools which helps the management in understanding the solution for the challenges. The business models helps the management in assessing the root cause of different problems and challenges and what impacts it creates on the business environment internally and externally. These models represents a concept however the actual and the real situations are much more complex and have lots of difficulties to be handled. It should be kept in mind that the management models are not the solutions but they are only an effective tool to clearly understand different problems faced by the company. The management should emphasize more on development and implementing on the strategy to over come the challenges successfully. BAYERISCHE MOTOREN WEKE (BMW): INTRODUCTION: BMW is world’s leading German automobiles and motorcycle manufactures. When the image of luxury item comes in mind the first and foremost name a person speaks is BMW. BMW is famous for its luxurious automobiles and motorcycles. BMW is the owner and producer of MINI brand and it is parent company of Rolls-Royce Motor Cars. BMW is producing its product in 5 countries with variety of models. In 2006, the Production of BMW automobiles and motorcycles are 1366,838. BMW manufactures its products in Germany, United Kingdom, Austria, and United States of America & South Africa. After 2006, now BMW has also begun its production in Chennai, India .Apart from producing automobiles and motorcycles, BMW is also involved in giving financial services to its business clients and regular customers. BMW believes in focus on their strengths and acquiring the every possible opportunity the have to increase their sales and focus on producing and selling superlative luxurious cars and motor bikes. This strategy results in unbelievable sales and high repute for the company. BMW value its strategies and always believed in producing high quality luxurious brands for their customer. BMW has gained a major share of market globally which results in high yields for the owner of BMW.BMW specialize in following products: BMW Motorcycles: After the World War I BMW began producing motorcycles engines. BMW has been the innovator of motorcycle suspension design before most other producers. BMW motorcycles are known for their best features, fine body and high quality motorcycle with its distinguishing features. BMW Automobiles: In 1962, BMW started producing automobiles and continuing it with highly successful rate. Since then BMW has been known for high quality, superlative luxurious automobiles with every passing day a new innovation in it. The success of BMW automobiles lies in its executive compact look, its luxurious quality, and its distinctive features. Effect of credit crunch on BMW: Due to the economic recession in the world, the German luxury car makers BMW sales has fall steeply in the first quarter of its fiscal year. The owner of BMW said that due to increased risks provision and tighter credit the profit of the BMW has fall suddenly. Moreover BMW sales have suddenly decreased due to the international financial crisis. It weakened the consumer spending power as a result there is steep fall in the earnings of BMW. The company offers jobs to hundreds of people now booked 40 million Euros to cover the redundancies. The profit before tax of the company is badly decreased by increase in raw material prices and strong euro. BMW is facing a severe credit crunch. The CVF the company faces is economical and financial. The CFV is caused by economic recession. The example is that the sales of the company fall suddenly. The consumers are now willing to buy smaller and more economical cars. This is because the buying or spending capacity of consumer decreases. The result is over all decrease in net profit before tax. Another example is as the spending power of the consumer falls, the demand for luxurious and expensive vehicles down too which results in decrease in sales. However the few manufactures of MINI are doing well as the demand for relatively fuel efficient car has hold a market share. However the BMW cars are not manufacturing in huge quantity as the demand falls globally. The challenge of credit crunch by economic recession adversely affected the BMW. . CLUB MEDITERIAN: (Where Happiness Means the World) INTRODUCTION: Club Mediterranean is a French firm engaged in the business of vacation resorts in most parts of the world. Club Med is famous for its exotic locations, and exclusive resorts with high quality services offered. In 1950, the Club Med was started by Gerard Blitz with simple huts at the beach sides and now it becomes exclusive resorts at many countries of the world. The Club med expands vastly in Switzerland, North America, Tunisia, Brazil, Mauritius, and many other countries. Initially the club med attracted young couples and new generation but later in becomes a symbol of excitement for many families. Initially the company owned the cruise ship and was launched in 1992. The club started its membership fee on annual basis and joining fee. The Club Med has becomes a profit making organization very soon. In 1990, the demand for holiday makers increased tremendously which leads the diversification of Club Med. It took over a chain of gyms, restaurants cum bar and diversified in service industry. Furthermore they started on establishing the resorts at exotic holiday places and now the Club Med is known for the best resorts chain in the world. Now Club Med offers many facilities in a single package like lodging, food, sport activities, games and shows. At some level, the villas of the owners are also rent out if they are not occupied. And now the Club Med is earning million dollars and serving in more than 24 countries. CLIMATE CHANGE CHALLENGE TO CLUB MED: The Climate change brings the alarming situation for the Club Med and affects the sales of the company drastically. Small islands of Pacific are greatly affected by the Climate change. The climate affects the air temperature by 0.6 –1.0oC seasonally and annually. Furthermore the degree of temperature has also risen which results in hot days and warm nights. This is all because of global warming. Furthermore the rate of rise of sea level also rises. Further more in future the climate condition will be in the Pacific islands as the more frequent and heavy rainfalls, the level of sea further rises and the air temperature and the degree of temperature rises too. The number of cyclones rises Overall the conditions becomes worse. This will adversely affects the marine sources and the level of fisheries falls. This also results in reduction of water resources in small islands due to low rainfall periods. This over all temperature adversely affects the tourism industry. The Club Med is in crucial situation due to this over all climatic condition. This brings the company a point where its costs are increasing day by day with low demand in tourism activity and decrease in net profit as the sales decline tremendously. Lack of water resources, tropical cyclones intensity, and rise in sea level makes the tourists think twice before planning a vacation for their family. Further more this climate challenge has drastically affect the financial position of the company. This results in major loss and the company has to rethink of their sales strategy and how much the company has to spend on advertisement and promotion on tourism of such island. The CFV factor is of environmental and globally warming is the key bases of this issue. Due to the pollution the temperature of the world increases results in melting of glacier. This over all raises the sea water levels and becomes a threat for tourists of beach area as it may cause them life risk. The environmental issues created a uncertainly in the atmosphere of Club Med and the owners are thinking of switching to some new business as this is rapidly bringing loss for them. BRITISH AEROSPACE COMPANY: INTRODUCTION: British Aerospace was a UK based firm which deals in aircraft, munitions and defense systems manufacturers. Marconi Electronic Systems, the defense electronic and naval shipbuilding subsidiary of General Electric Company was purchased by BAE. Initially in 1981, the federal government purchases 51.57% shares of the company and it was converted into British Aerospace Public Limited Company. Later the British Government sold its remaining shares and maintained a Golden Share of one pound. This allows the company to veto foreign control by the board. In 1985, the Saudi Arabian and UK Governments signed a contract. And in this way Saudi Arabian Government becomes the prime contractor of the company. In 1998, the Defence consolidation became a major issue for European defence groups. The BAS system merges with Germany to form a giant aerospace system. Later the merger of GEC makes the company to penetrate in United States defence markets. The Company initially named as “New British Aerospace which was officially established in 1999 November. And now it is known as BAE Systems. CORPORATE SOCAIL RESPONSIBILITY OF BRITISH AEROSPACE SYSTEM: The BAS Systems faced the challenge of corporate social responsibility and is in crucial position as the British Government cancelled the agreement with Al Yamamah arms of Saudi Arabian Government. The British Government has allegations of bribery against Al Yamamah arms and ceased the agreement. The cancellation of contract was designed to save 10 billion Euros secured BAE Systems with Saudi Arabian Government. This amount was secured against 72 Euro fighter jets held by the Saudi Government. The British Government of Mr. Tony Blair shows the social responsibility also known as corporate social responsibility. Later when the Iraq war began, the British Government claimed that the fraud and bribery allegations should be removed from the Saudi Government as this is not in best interest of British Government. The excuse the British Government laid was that it could increase the unemployment rate in the country. The CVF of BAS was social responsibility of any Corporation. This brings huge loss of reputation of BAS Systems. The foreign policy of British Government has damage the image of the country as a trusted and incorrupt country. This brings over all a great loss for the BAE Systems. And later the British Government enters a new contract of lucrative arms with Saudi Government. Now the question arises is the BAE System is socially responsible. The conflicting foreign policy of British Government leads to have a great reputation loss. The Goodwill of the Company falls drastically and many foreign governments are reluctant to make any future investments in BAE Systems. Further more International Corporate Governance requires the transparent and good corporate behavior towards the country. But here the BAE systems drastically failed to create a positive image and leads to long term damage of repute of BAE Systems. GREEN KING INTRODUCTION: Green King was established in 1799 and is considered as Best British brewery in the world. Green King was known for its pubs all over the world as well as for best brewery makers and suppliers in the world. The company owns the pubs and hotels chains in urban and rural areas of the UK and other European Countries. The company has won award for producing best brewery in the world. Green King is nowadays running 1400 pubs all over the world. Green King has grown tremendously through mergers and acquisitions. Key Acquisitions of Green King during recent years are Morland, Ruddles, Ridley’s and Belhaven, & Hardys and Hansons. Further more Green King announced in 2007, that the company has acquired 35 Strong LOCH FYNE chain of restaurants which specialize in fish and other related food items. Sponsorship: Further more Green King sponsored a football club since late 1990’s.The club is known as Ipswich Town Football Club. This club has play off triumph in 2000 and gain fifth place in Premier League. Brands: The different brands the Green Kings offers to the consumers are: Green King Brands. Ruddles Brands. Morland Brands. Ridley’s Hardys and Hansons. All of these brands are operated by Green King. Green King is known for its finest quality of brewery products since ages. BUSINESS ETHICS- GREEN KING Green King is one of the biggest manufacturers of the brewery products in UK and nowadays facing the biggest challenges of Business Ethics as most of the consumer protests intensely the Green King Business strategies. They are of the opinion that Green King has expanded through acquisition and mergers and created a kind of monopoly in the brewery industry. The protestor claimed Green King as “GREEDY KING.” They are of the opinion that the company has left limited choices for them. Green King was strongly opposed as it removed locally produced beer manufacturer through acquisition and promotes the sales of other guests’ beers. This is simply against the business ethics. The CFV is of ethics and cultures responsibilities The Green King has to promote the local industries and let the competitor compete. But instead Green King tried to acquire the competitor through acquisition or mergers. This result in limited choice for the pub consumers as well as the manufacture enjoys the high selling price in the market. The CFV of ethical and social challenge faced by the Green King has adverse affects on its repute. It has created an opinion of Greedy King among its consumers. It results in decline in sales as the consumers feel a limited choice in brewery products. Limited choice leads to loose of interest in the product. By creating a kind of monopoly, the Green King has not only staked its repute, but results in decline of sales, low profit and ultimately low yield for the owners. REFRENCES: Mauro F. Guillén 1994 “ Models of Management, work, authority, and organization in comparison” Diane Huber -2005” Disease Management a guide for a case managers” Richard T. De George1986” Business Ethics” William B. Werther, David Chandler 2005“ Strategic Corporate Social responsibilities” Susanne Becken, John E. Hay 2007 “ Tourism & Climate Change, risks and opportunities” Peter Navarro-2006 “The well time strategy –managing the business cycle for competitive advantage” http://www.fleetnews.co.uk/news/story/BMW-defies-credit-crunch/48521 http://www.clubmed.com.au/cgi-bin/clubmed55/SP/activitiesDescription.do?page=CARBON_CALCULATOR_14AE&PAYS=14&LANG=AE Read More