Report of Michael Hill Jewellery - Case Study Example

 Report of Michael Hill Jewellery Leadership 1. Current leadership at MJH The leadership style at MJH is compelling, insightful, thought compelling and engaging. There is a democratic style of leadership or a team approach style where managers meet to discuss plans and issues. The managers then use individual employee knowledge and skills to aid in building consensus that determines the progress of the organisation. Employees make contributions to decision making processes making them feel that their opinion is valued. This boosts the morale of the employees and as such complies with the overall strategy of the organisation which is to provide top quality products and service to the customers and long time returns to the stakeholders. 2. Blake and Mouton This leadership theory describes two extremes of leadership concern. Concern for production and concern for people, the leader who is concerned for production targets high results and productivity while the one concerned about people cares little about productivity and is more concerned about being loved and approved by the people. This theory defines a few types of leaders; the country club leader has the highest concern for people. This type of leaders assumes that if an employee is happy, work will be well carried out. The relationship between the leader and the employee is casual just like that of friends. The impoverished leader is more concerned about productivity as well as the employees. This leader gives little motivation therefore leaving the employees confused about their job and find no joy in doing their set duties. The middle of the road leader balances between his concern for the people and productivity. He settles for less satisfying work and the end result is mediocre performance. There is also the team leader who insists on high levels of production and employee performance. The leader sets goals and assists the employees in meeting these goals. Finally the authoritarian leader who leads by controlling, overpowering and demanding; the leader is more concerned about productivity and employees are a tool for achieving this productivity. The objective of this model of leadership is to show that when employee and results concerns are high, productivity will increase accordingly. The leadership at MHJ should better understand this theory as it will greatly improve the productivity of the employees and in turn lead to higher profits. Motivation 3. MHJ use of motivational processes The organisation strives to provide the most fun and friendly environment for the employees. They emphasise that just like their collection, each employee is seen as unique with valuable insights and ideas. The organisation offers bonuses to high performing employees on top of their decent remuneration package, and safe work environment in the four countries they are located by ensuring they meet the health and safety laws and regulations. Motivation is the force behind people’s actions, which makes them outstanding (Adetule, 2011). MHJ understands the Maslow’s hierarchy of needs theory therefore ensure that the employees are satisfied since people act to satisfy deprived needs. Challenging and creative work such as production and sales, meeting targets are dominant at MHJ therefore satisfying the self actualisation need. Internal promotions and relegating duties to employees is a way of meeting the esteem needs since it makes employees feel valued and important. The organisation allows friendly work environment and interaction with colleagues as well as customers therefore meeting the social needs of the employee. The work environment is safe and all the health rules and regulations are followed hence meeting the safety needs. Finally, Physiological needs which are met by offering workers breaks, rest and refreshments. McClelland’s acquired needs theory acknowledges that people prioritize needs differently. This theory further posits that people are not born with needs but acquire them through learned experiences (Armstrong, 2007). The need for achievement at MHJ is met by giving people targets and a deadline that they are supposed to meet. Need for affiliation is met through the relationships that are established between employees in the organisation. Need for power is met by the employees who are constantly seeking promotion. Such employees love being in charge, want to influence others and prefer to be placed in competitive and status oriented situations. MHJ adopted the Harry Friedman’s retail system in 1994 which encouraged store managers to run the shops as their own small businesses. This contributed to the overall growth of the franchise. It enhanced individual sales professionals' development by concentrating on the setting of individual targets and employee’s levels of accountability. MHJ also allows the employees to receive accredited training, to build their own client base, participate in diamond presentations, earn good bonuses and attending award ceremonies. This is a great way of keeping the employees motivated. MHJ should always look for ways to improve the productivity of workers by motivating them using welfare benefits such as an improved health package, extended benefit packages such as offering scholarships for employees children and recreation where employees can meet outside the work environment to better satisfy their need for better relationships. Human Resource Management 4. Human Resource Management- People are the main priority at MHJ. With the company’s continuous growth, a more structured approach to HRM continues to be put in place. The primary aim of HRM practices is to attract, motivate and retain employees. MHJs main concern should be how to achieve this by planning, staffing, appraisals, compensation, training staff and better union management relations. The organisation should allocate better resources to ensure that HRM activities are achieved since they are of paramount importance to the overall performance of the organisation. The purpose of managing human resource is to have the most qualified and motivated employee since they offer a competitive advantage in that there is superior quality production, lower employee turnover, better profits, improved acceptance and adoption of corporate strategy and lower production costs. HRM strategies at MHJ are done by linking HRM practices with the company’s overall strategy to improve business and develop the organisations culture therefore fostering flexibility and innovation. HR activities such as hiring, training, rewarding employees are carried out focusing on the company’s goals and objectives. MHJ focuses on identifying, analysis and balance of MHJs external opportunities and threats, and its internal strengths and weaknesses. This has enhanced the capacity of the organisation in maintaining its competitiveness and overall success. Performance appraisal is where the employees interact with the manager to discuss and asses their performance (Armstrong, 2007). 360 degree feedback allows the manager to have a complete profile of the employee, management by objectives allows the manager and employee agree on specifically set objectives with a deadline, the rating scale technique allows the appraiser to have a grading system of the employee performance. Behavioural check list contains a list of criteria that an employee should follow to be a competent worker in the organisation. Psychological appraisals evaluate the employee’s level of intelligence, emotional stability and similar psychological characteristics. Performance ranking method; where the performance of the employee is ranked from the highest to the lowest. Limitations: The future is unpredictable It is expensive Time consuming Excess staffing Strategy 5. MHJs next strategic move, the kind of problems likely to be encountered and how they could be overcome. MHJ is likely to expand its stores into the US and UK to capture the growing need for jewellery in these areas. MHJ focuses on steady growth for its long term success. Not only has the brand changed over the years but also has moved from mass discounting to production of cheaper jewellery using expensive rocks affordable for the average customers. There are several risks involved if the company were to expand to new territories. There is the likelihood that MHJ will face stiff competition from other companies with branded stores already set up in these regions for example James Pascoe Ltd. The already set up brands are likely to respond with stiff competition on seeing the presence of an upstart in their territory. There is also the recent gold price spike that may affect the profit margins for a period of time. MHJ can overcome this by conducting extensive research targeted towards the local buying behaviour which can vary from state to state or from suburb to suburb. Careful planning is what has contributed to the successful growth of the company. As such, with continued strategic planning, the vision to expand into new regions is attainable. MHJ also enjoys an outstanding good relationship with Westfield, good positions in Westfield’s USA malls will be easier to acquire. Strategic direction Strategic direction create sustainable corporate value connecting mission to vision and value creating shared goals and objectives 6. SWOT and PEST analysis Strength- design of the stores and ambiance, steady growth in revenue. Weakness- dependence on one region, High inventory. Opportunities- online shopping is gaining popularity, expansion to other regions. Threats- Rise in labour wages, stiff competition. Political- ability to acquire tax deals. Economic- growth in revenue due to increased retail spending Social- trends in the market for acquiring new affordable jewellery designs Technological- mass production at a reduced cost due to advances in technology. 7. MHJ current strategy, Mission, Objectives and competitive advantage. Their overall mission is to become the most people focused jeweller globally. MHJs objectives are to ensure there is sufficient long term returns for the customers and ensuring that employees have long term employment in a motivational environment. The company continues to improve its consumer base for example the move to engage Zuni for the purpose of developing enterprise wide digital strategy for MHJ. The company also uses a lot of advertisements that are catchy to attract and retain new customers. Their competitive advantage is influenced by their team and strength in sale. The company motivates employees in various ways through Human resource management as mentioned earlier in this paper. They value their employees regarding them as their biggest asset. They are trained, monitored properly and motivated through good perks and related activities.MHJ makes jewellery from expensive rocks that are affordable to the average person, giving them an edge over their competition. They also get their diamonds mainly from Canada which is a politically stable company therefore ensuring that they have constant supply that will not be interrupted due to instability in the political system. Culture and organisational behaviour 8. Culture of MHJ and what to consider when making a strategic plan. Hofstede’s frame work. Michael Hill Jewellery encourages a culture of honesty, being ethical, innovative and a platform for successful growth. People are key to the growth of the company; therefore their needs should always be put as a top priority when planning to implement a strategic plan. Hofstede’s framework posits that value can be placed upon a few cultural dimensions (Sims, 2007). Equality versus inequality, where entry level employees are contented with the fact that power, is distributed unequally in the organization. Individualism vs. collectivism, this is the extent to which people are absorbed into groups. As much as it is important to consider people as a group rather than individuals, MHJ recognizes individual work and therefore reward those that are exceptional. Uncertainty avoidance at MHJ can be considered high since the organization culture is open to change but with rules and policies meant to guide it.Masculinity vs. femininity- MHJ is more in to feminine goals, which can be termed as personal, being, friendly work environment, nurturing and cooperation as compared to the more masculine goals such as earnings, titles, promotions and respect. Finally, the long vs. short term; MHJ realizes that business goals may take time to achieve and appreciate long term employees as it is stated in their objectives. Short term orientation is by realizing that employees can leave any time as well as setting short term objectives to attain certain successes. The key elements of organizational behavior are the people, structure and the environment and technology guided by the external environment in which people operate. The people make up the social system at Michael hill. There is the individual employee who is allotted work to perform, the relation between superiors and employees, the people who work as a team and the external environment such as the customers or government representatives. There is the hierarchy of authority, division of labor according to levels of experience and qualifications, formal rules and a centre of authority. Sustainability and globalisation 9. Benefits and challenges that MHJ will encounter in expanding in expanding overseas. By going global, different consumer cultures can offer an opportunity for lucrative business (Mahadevan, 2010). There is the opportunity of acquiring new customers based on curiosity without attracting immediate competition. Research on consumer behaviour is therefore necessary when planning to set up abroad. Venturing into new economies can offer favourable conditions for business especially when faced with strict government policies at home or lower taxation rates. It is also an opportunity to refresh MHJ’s brand. However, there are several disadvantages of setting up abroad such as cultural barriers, what may do well in one country may not be accepted in another, regulatory barriers where some countries make it difficult for foreign investments to set up in their countries. Weaknesses of competitors in other countries are always overestimated and underestimating their strengths. This might have ripple effects on MHJ if it were to underestimate the competitor’s strengths. MHJ is likely to face marketing barriers when going global. Deep cultural distinctions may affect the purchasing of jewels by people in another country. The other countries legislation may also serve as a barrier and a stumbling block for the franchise. The local tax regime may also have injurious effects on the franchise as it expands abroad. The quadruple bottom line involves the four P’s being, profit, people, planet and purpose (Dessler, 2008).MHJ does not ride on profit alone but rather considers how to attain important goals without compromising on the important values. The company considers the social benefits of the people offering CSR activities, the environment and economic development with integrity and uncovering spiritual fulfillment and joy among the people especially the workers. References: Armstrong, M. (2007). A handbook of human resource management practice. London [u.a.: Kogan Page. Sims, R. R. (2007). Human resource management: Contemporary issues, challenges, and opportunities. Charlotte, N.C: Information Age Pub. Adetule, J. (2011). Handbook on management theories. Bloomington: Author House. Mahadevan, B. (2010). Operations management: Theory and practice. Upper Saddle River: Pearson. Dessler, G. (2008). Human resource management. Upper Saddle River, NJ: Pearson Prentice Hall. Read More