Sanitary Decisions for Companys Profitability - Report Example

EXECUTIVE SUMMARY This is a Management report aimed at Wimpole Ltd as part of its structural change and leadership orientation to meet the challenges arising out of the current economic slowdown. This report considers the options available before the board and suggests ways and methods of implementing change as well as issues involved in selling the idea to the board and getting the ideas implemented. INTRODUCTION This is a report that has been commissioned by Wimpole Ltd to ABC consultants (us) for recommending ways and means to beat the current recession and make the business grow. The idea behind this consultant report is to suggest methods wherein the company can be made profitable to meet the challenges posed by the current downturn. The recommendations that we as consultants have given can be divided into the following categories as outlined in the subsequent sections. DIVISION ALONG PRODUCT LINES First, the idea is to structure the company along product lines instead of the current structure where each of the verticals would have a separate department instead of along functional lines. The current division is based on functional lines wherein the sales department is separate and the insurance department is separate. The current structure lends itself to unnecessary redundancy and according to the theory (Miles, 1978); division along product lines is any day better than division along functional lines. If the company adopts this method, the divisions would be along verticals instead of the horizontal division currently in place. This movement towards product lines is appropriate because the people in one product line would be motivated more to perform and function rather than people in different functions working separately. This makes eminent business sense as the people in different departments that are current existing can get together and plan for their sales and marketing strategies as a means of achieving their targets. The appropriate theories of leadership that can be applied here are the Theory X and the Theory Y which state that a leader can apply these two competing visions of leadership to get the work done .(Mullins, 2008) As part of the division of the company along vertical product lines, it is necessary to structure the company in such a way that the board members are also structured along the product line strategy and that they operate within the structures prescribed in this management report. This division of the company along product lines makes for eminent business sense and hence they can work for the betterment of the company. TARGET BASED SELLING According to Maslow’s theory of Motivation, people respond to a variety of inducements ranging from simple monetary benefits to comprehensive and visionary motivations arising out of altruistic motives. (Torrington, 2002) This theory holds that once the people are sufficiently empowered to be motivated by these inducements, then the level of performance that they can deliver goes up correspondingly. Hence, by applying this theory, one gets the conclusion that target based selling strategies would be effective from the monetary inducements point of view as well as the motivational aspects of selling. Once targets are assigned to sales people, they are factors that spur these individuals into achieving the targets and then working towards them in a manner that would be very productive from the point of view of the company. Further, the bonus component of the salary, if increased, would be an added motivator for the sales and marketing professionals to rev up their performance and meet the corresponding sales and marketing targets. The appropriate theory that can be applied here is the Herzberg’s Hygiene theory where the presence of hygiene factors like targets is necessary and the absence of rewards is a de-motivating factor. (Tyson, 1995) Hence, by applying this theory, one gets the conclusion that target based selling and bonus components as part of the package offered to the employees mean that they are sufficiently motivated to perform at their highest level. DIRECT LINES OF COMMUNICATION The next set of recommendations would revolve around establishing direct lines of communication between the brokers and the clients without going through the sales people. This would reduce many of the redundancies in communication that arise as a result of the fact that the brokers have to go through the sales people and hence the extra layer of communication is reduced. This is borne out by research that states that as the number of feedback loops reduces so does the propensity for communication drops and wastage or leakage of communication among the different parties involved in the communication. (Torrington, 2002) With the establishment of direct lines of communication, one would also get the added advantage of direct and seamless communication between the brokers and the clients resulting in less overheads and more productive use of the time allotted for the call. Recent research has shown that on an average, the call centre operator spends 30-40% of his or her time on non-productive calls. This can be reduced substantially if the brokers and clients talk to each other directly. This is the basic premise of establishing the direct communication channel. VALUES AND CHANGE FROM THE TOP Values are critical to any business and Wimpole is no exception. Theory states that for a business to be successful there has to be adherence to a set of values that can be followed irrespective of the people who are executing the orders. These adoption of values has to come from the top and hence, the next set of recommendations are centred around how to drive values from the top and involve the board in making recommendations and effectively driving values from the top. Further, the change management component of the strategy has to be implemented from the top and this would involve the board members involving themselves personally in reaching out to their employees in a manner that indicates that they are serious about managing and leading change and taking the company into the 21st century. This is a sound strategy and something that is based on theories of change management and leadership that emphasize top down approaches as well as bottom up approaches when dealing with change. ( Mullins, 2008) The change has to come from the top and be adopted by the bottom as well to make a substantial difference to the company and its operations going forward. The change has to be both ways and though the vision and mission have to adopt and driven from the top, the bottom of the company needs to be involved as well. Hence, to lead the company into the 21st century, both the top and the bottom have to be involved in a concerted effort at driving change. ISSUES IN SELLING THE IDEA TO THE BOARD In this section, we consider some of the issues that would be encountered when selling the idea to the board. The primary issue would be of resistance to the idea of change and its application to the company. As any textbook on Human Resource Management would indicate, the resistance to change is the fundamental block towards making the reality of change and hence this is one aspect that needs to be taken into consideration. Further, the division of the company along product lines might threaten existing hierarchies and positions of perks and privilege. Hence, this aspect must be taken into account when selling the idea to the board. ISSUES IN IMPLEMENTING THE IDEAS IN PRACTICE Selling the idea is one thing and implementing the same is a different matter. For effective implementation of the idea in the company, there needs to be a well thought out strategy to ensure that the ideas once accepted by the board are then put into practice and then implemented fully by the board. As discussed above, resistance to change is the stumbling block behind getting the ideas accepted as well as implemented. For an effective implementation strategy, one has to consider the fact that implementation would involve the detail oriented process wherein concept of accepting change has to be taken into consideration. CONCLUSION In conclusion, this report has suggested ways in which Wimpole can improve its performance and meet the expectations of its shareholders as well as beat the recession by adopting innovative and forward looking management methods as well as take steps to improve its financial profitability. We have considered the issue in depth and have reached some conclusions that were presented in the preceding sections. We conclude this report by hoping that Wimpole Ltd would adopt these suggestions and then execute them for the betterment of the company and the employees. RECOMMENDATIONS The recommendations have been listed in the sections above and with we present the same to the board for their consideration and acceptance. We are not including any new material in this section except to restate our recommendations made in the preceding sections. We look forward to be of assistance in any future endeavours that the company might wish to employ our services. REFERENCES Legge, K. (1995) Human Resource Management: Rhetoric’s and Realities. London: Macmillan Miles, R.E. and Snow, C.C. (1978) Organisational Strategy, Strategy and Process. New York: McGraw-Hill. Mullins, Laurie. (2008). Management and Organisational Behavior. London: Prentice – Hall. Sparrow, P. and Cooper, C. (2003) The Employment Relationship: Key Challenges for HR. London: Butterworth-Heinemann Torrington, D.P. and Chapman, J.B. (1979) Personnel Management. Hemel Hempstead: Prentice Hall. Torrington, D.P., Hall, L.A. and Taylor, S. (2002) Human Resource Management (5th edition). Harlow: Pearson Education Tyson, S. (1995) Human Resource Strategy: Towards a General Theory of Human Resource Management. London: Pitman Read More